LONDON MARKET EARLY CALL: FTSE 100 to fall as Asia slumps on AI worry

(Alliance News) - Stocks in London are set to open lower on Thursday, ahead of a raft of corporate earnings, as equities in Asia struggled with investor unease surrounding the artificial intelligence sector once again leading to a sell-off.

IG says futures indicate the FTSE 100 to open 43.8 points lower, 0.4%, at 10,709.08 on Thursday. The index of London large-caps closed up 19.88 points, 0.2%, at 10,752.88 Wednesday, as sentiment improved as the day wore on.

In Tokyo, the Nikkei 225 was down 2.3% in late afternoon dealings. In China, the Shanghai Composite was down 1.6%. The Hang Seng Index in Hong Kong tumbled 3.1%, while Sydney's S&P/ASX 200 was down 0.4%.

Declining in Tokyo were firms exposed to the AI chip sector, with Tokyo Electron shedding 5.8% and SoftBank Group losing 5.6%.

In Seoul, SK Hynix was down 6.3%, while Samsung Electronics shed 4.7%. The wider Kospi was 3.8% lower.

"New York put together a decent run for most of the session, helped by stronger AI earnings, lower oil and a softer rates backdrop, but the handoff into Asia turned less convincing once Meta warned that AI serving costs would rise and Tesla cut its capex outlook," SPI Asset Management analyst Stephen Innes commented.

Meta Platforms rose 2.2% in after hours trade in New York following its third quarter earnings.

In a subsequent call, Chief Financial Officer Susan Li said Meta sees "multiple" paths to monetisation for AI agent Muse, beginning with subscriptions.

She said Meta also sees a "significant" opportunity to extend Muse to small businesses. Based on a recent user survey, she estimates that at least 500 million self-identified small businesses use Meta's family of apps to reach customers and generate revenue.

"Muse could help these businesses acquire customers and operate more efficiently while helping people complete transactions," she said.

Li said that Muse's computing intensity means that expanding its user base will require significant investment and she expects total serving costs to rise.

Meanwhile, Tesla lost 3.3% in extended trade. Tesla reported revenue of USD28.05 billion in the three months to September 30, largely flat from USD28.10 billion a year ago. Net income attributable to the company fell 43% to USD787 million from USD1.37 billion.

Prior to the earnings, Wall Street ended higher on Wednesday. The Dow Jones Industrial Average ended up 0.7%, the S&P 500 up 0.6% and the Nasdaq Composite 1.1% higher.

Sterling traded at USD1.3398 early Thursday, from USD1.3389 at the time of the London equities close on Wednesday. Against the euro, it faded to EUR1.1913 from EUR1.1930. It hit EUR1.1939 on Wednesday, its best level against the common currency since May 2025.

The euro rose to USD1.1243 from USD1.1225 at the time of the closing bell in London on Wednesday. Against the yen, the dollar faded to JPY157.41 from JPY158.05.

The yield on the 10-year US Treasury narrowed to 5.09% early Thursday, from 5.11% late Wednesday afternoon. The 30-year yield narrowed to 5.38% from 5.41%.

A barrel of Brent surged to USD111.24 early Thursday, from USD109.14 late Wednesday afternoon. Gold traded at USD4,070.23 an ounce, down from USD4,139.04.

Thursday's busy local corporate calendar has half-year results from grocer J Sainsbury and third quarter results from high street lender Barclays. In addition, trading statements are due from exchange operator London Stock Exchange Group, pest control specialist Rentokil Initial, hotel group InterContinental Hotels Group and publisher Relx, among others.

Thursday's global economic calendar has a consumer confidence report in the eurozone at 1500 BST, after initial jobless claims data in the US at 1330.

By Eric Cunha, Alliance News news editor

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