London's stock market moved cautiously on Friday, with the two principal FTSE benchmarks posting slight declines as traders reacted to a week of uncertainty centered on the release of new artificial intelligence tools and mixed domestic data.
At 1140 GMT the blue-chip FTSE 100 and the mid-cap FTSE 250 were each down 0.1%. Despite the intraday weakness, both indexes were positioned to record small gains over the week.
Market participants have grown increasingly attentive to a wave of AI tool launches that began in late January. That flurry of new models has injected bouts of volatility into global markets as investors attempt to assess how advances in AI might affect incumbent businesses.
In the UK, the majority of the weekly selling pressure was concentrated in the technology sector, life insurers and banks. Those three sectors were set to finish the week with declines exceeding 4% each.
However, on Friday technology stocks staged a recovery, collectively gaining 3.8% for the session. Among the better performers, information and analytics group RELX rose 5.4%, and credit analytics firm Experian added 4.3%, both bouncing back from earlier weakness.
Defence-related equities also benefited from a positive reassessment by investors, climbing 2% after a report indicated the prime minister plans to advocate for a multinational defence initiative at the upcoming Munich Security Conference. The prospect of enhanced European cooperation in defence was viewed as supportive of companies in that segment.
Pressure on the FTSE 100 came from the mining cohort, with major miners including Rio Tinto and Antofagasta each falling by more than 2%. Analysts and traders linked those moves to declines in copper prices, which weighed on sentiment toward extractive stocks.
On the corporate front, NatWest reported a 24% increase in annual profit and announced more ambitious performance targets as it increases investment in Britain's wealth-management market. Despite the upbeat earnings release and strategic aims, NatWest shares eased 3.3% after analysts noted that much of the improved guidance appeared to be already reflected in the stock's price.
Macro data released during the week showed Britain's economy expanded by just 0.1% in the fourth quarter, matching the pace recorded in the prior quarter. The report said this modest growth partly reflected uncertainty in the run-up to finance minister Rachel Reeves' budget last November.
Market expectations around monetary policy shifted modestly following the data: investors were pricing in a 63.4% probability that the Bank of England would cut interest rates by 25 basis points at its March meeting.
Bottom line: The FTSE this week reflected a market caught between AI-driven reappraisals of future corporate disruption, sector-specific moves - notably in defence and mining - and domestic economic readings that have renewed focus on the Bank of England's next policy decision.