(Sharecast News) - London stocks were flat by midday on Friday following solid results from NatWest and ahead of the latest US inflation reading, as worries about AI disruption continued to weigh on sentiment.
The FTSE 100 was steady at 10,398.98, flitting between small gains and losses but outperforming European peers, as the benchmark Stoxx 600 index fell 0.4%.
Russ Mould, investment director at AJ Bell, said: "Association with AI has gone from party to peril as investors reappraise what the technology means for companies.
"Some are concerned about excessive levels of spending and others fear AI will disrupt multiple industries. It all adds up to a cocktail of worries and that's bad for market sentiment more broadly.
"The FTSE 100 bucked the sell-off across Europe and Asia on Friday thanks to strength in industrials, banks and miners."
Investors were eyeing the US consumer price index for January at 1330 GMT.
Darren Nathan at Hargreaves Lansdown said: "Hopes of a US rate cut next month are now below 8% down from over 18% just a week ago, after stronger-than-expected US jobs data earlier this week. Inflation's the number to watch today. January core CPI inflation is expected to rise 0.34% over December, with the annualised number forecast to fall from 2.6% to 2.5%, the lowest level since March 2021.
"The key question is whether labour market strength can continue to build without injecting unwanted heat into the economy. Given the high tension levels on Wall Street, markets are likely to be more sensitive than usual to a miss in either direction."
Trade news was also in focus following a report that US President Donald Trump is planning to roll back some tariffs on steel and aluminium products.
Trump hit steel and aluminium imports with tariffs of up to 50% last summer and has expanded the taxes to a range of goods made from those metals including washing machines and ovens.
But according to the Financial Times, citing three people familiar with the matter, his administration is now reviewing the list of products affected by the levies and plans to exempt some items, halt the expansion of the lists and instead launch more targeted national security probes into specific goods.
Sources told the FT that trade officials in the commerce department and US trade representative's office believed the tariffs were hurting consumers by raising prices for goods such as pie tins and food and drink cans.
Countries including the UK, Mexico and Canada as well as EU members could stand to benefit from any easing of the US's tariffs on goods made of steel and aluminium.
On home shores, industry data out earlier showed that retail footfall softened slightly in January, although the pace of decline was a notable improvement on December.
According the latest BRC-Sensormatic footfall monitor, total UK footfall fell 0.6% in January year-on-year, as stormy winter weather kept shoppers at home. However, it was a notable improvement on the previous month's 2.9% slide.
In equity markets, software stocks that have been caught up in the recent AI selloff were on the rise, with Relx, Experian, Pearson and LSEG among the top gainers on the FTSE 100.
On the downside, NatWest slumped, unable to hold onto earlier gains despite reporting a better-than-expected increase in full-year profits and lifting performance targets.
Pre-tax operating profit in the 12 months to December jumped 24.4% to £7.7bn, beating the £7.5bn company-compiled forecast. The lender also announced a £750m share buyback for the first half of 2026.
NatWest stretched its outlook for a return on tangible equity - a key industry measure - out to 2028, targeting more than 18% by the end of that year, up from previous guidance of greater than 15% in 2027. For this year it is set to be greater than 17%.
Matt Britzman, senior equity analyst at HL, said: "Investors should be pleased with these results, but there'll still be a lingering question mark around the price being paid for the Evelyn Partners deal that sent shares tumbling earlier in the week.
"Buybacks are still on the cards, but at a reduced level for the time being. The push for lucrative non-interest income shouldn't come as a surprise, and while the price may feel lofty, the strategic rationale looks solid."
Flutter Entertainment tumbled after US online betting company DraftKings' 2026 outlook for sales and profit missed expectations, sending the shares sharply lower.
Market Movers
FTSE 100 (UKX) 10,398.98 -0.03%
FTSE 250 (MCX) 23,262.09 -0.18%
techMARK (TASX) 6,028.78 0.33%
FTSE 100 - Risers
Relx plc (REL) 2,169.00p 5.70%
Experian (EXPN) 2,502.00p 3.90%
Rolls-Royce Holdings (RR.) 1,260.50p 2.81%
Halma (HLMA) 3,844.00p 2.73%
3i Group (III) 3,349.00p 2.45%
Metlen Energy & Metals (MTLN) 35.50p 2.31%
London Stock Exchange Group (LSEG) 7,686.00p 2.21%
Pearson (PSON) 923.40p 2.12%
Pershing Square Holdings Ltd NPV (PSH) 4,456.00p 1.69%
AstraZeneca (AZN) 15,132.00p 1.52%
FTSE 100 - Fallers
Flutter Entertainment (DI) (FLTR) 9,580.00p -8.72%
Barratt Redrow (BTRW) 381.20p -3.00%
NATWEST GROUP (NWG) 577.40p -2.96%
Prudential (PRU) 1,055.00p -2.54%
Entain (ENT) 581.20p -2.35%
HSBC Holdings (HSBA) 1,239.60p -2.13%
Antofagasta (ANTO) 3,650.00p -2.12%
Barclays (BARC) 453.90p -2.09%
Rio Tinto (RIO) 7,065.00p -2.02%
Fresnillo (FRES) 3,692.00p -2.02%
FTSE 250 - Risers
WPP (WPP) 270.70p 4.40%
Morgan Sindall Group (MGNS) 5,470.00p 3.01%
Dr. Martens (DOCS) 68.80p 2.30%
Foresight Environmental Infrastructure Limited (FGEN) 70.50p 2.03%
RTW Biotech Opportunities Ltd (RTW) 2.13p 1.91%
Renishaw (RSW) 4,135.00p 1.85%
Raspberry PI Holdings (RPI) 276.20p 1.54%
Chemring Group (CHG) 504.00p 1.51%
Wetherspoon (J.D.) (JDW) 744.50p 1.43%
Kainos Group (KNOS) 709.50p 1.43%
FTSE 250 - Fallers
Ashmore Group (ASHM) 246.40p -3.75%
Great Portland Estates (GPE) 332.00p -2.92%
Hochschild Mining (HOC) 655.50p -2.89%
Trainline (TRN) 196.40p -2.77%
BlackRock World Mining Trust (BRWM) 925.00p -2.73%
Playtech (PTEC) 332.50p -2.64%
Baillie Gifford Japan Trust (BGFD) 928.00p -2.52%
Derwent London (DLN) 1,795.00p -2.45%
Breedon Group (BREE) 351.00p -2.12%
BioPharma Credit (BPCR) 0.95p -2.07%