Investors fleeing chip rout find shelter in FTSE 100
Stocks with little direct exposure to AI continue to have the edge at present, says Chris Beauchamp, Chief Market Analyst at online trading and investing platform IG.
Chip carnage sees FTSE 100 & Dow benefit
Right now, not being so dependent on chip stocks is a good thing. The rotation in markets has seen money desert chip and AI stocks, and flow to areas where these are either less prominent or non-existent. Once more the FTSE 100 finds itself in favour, its combination of dividend payers and names relatively unexposed to AI providing a haven, while in the US the Dow and Russell 2000 continue to show greater resilience than the techy Nasdaq & S&P 500. This is all healthy market action, but is little comfort to latecomers to the tech rally, who were assuming that the euphoria for the sector would continue.
Gold and silver take a drubbing
It’s been a miserable time for precious metals and there is no sign of this ending soon. Both teeter on the edge of a break to fresh lows, a key signal in these momentum-driven markets, helped along by a strengthening US dollar. Meanwhile bitcoin’s relative resilience is a notable step-change, suggesting that gold may finally have lost its edge over the cryptocurrency.
Author
Chris Beauchamp has been with IG for four years, and in that time has become a regular commentator and analyst for the financial press and TV, with appearances on all the major financial channels as well as the BBC and Sky News.
