FTSE indexes exhibited a lackluster performance on Friday, mirroring a cautious global sentiment amid a week marked by apprehensions regarding AI disruption. In the interim, defense stocks experienced a rise as investors looked forward to heightened European collaboration that may bolster the sector. The blue-chip FTSE 100 and the mid-cap FTSE 250 both recorded a decrease of 0.1% at 1140. Nonetheless, the indexes appeared set for modest weekly gains. The recent proliferation of artificial intelligence tools since late January has led to notable volatility in global markets, as investors endeavor to evaluate the implications of these emerging models on traditional enterprises.

In the UK, significant declines were observed in the technology sector, life insurers, and banks. The sectors are set to incur weekly losses surpassing 4% each. On Friday, technology equities demonstrated a significant recovery, recording a 3.8% increase. RELX experienced an impressive increase of 5.4%, while other stocks that were affected during the selloff, including credit analytics firm Experian, rose by 4.3%. Defence stocks experienced an increase, rising by 2% as investors reacted to a report indicating that Prime Minister Keir Starmer intends to advocate for a multinational defence initiative at the Munich Security Conference this weekend.

The FTSE 100 encountered downward pressure from mining companies such as Rio Tinto and Antofagasta, both of which recorded declines exceeding 2%, indicative of the recent downturn in copper prices. On the earnings front, NatWest reported a 24% jump in annual profit and set more ambitious performance targets as it steps up investment in Britain’s costly but potentially lucrative wealth-management market. The shares of the British bank saw a decrease of 3.3%, as analysts suggested that a considerable amount of the revised targets had already been incorporated into the pricing.

The week also brought data indicating that Britain’s economy expanded by a mere 0.1% in the fourth quarter, aligning with the growth rate of the previous quarter and partially reflecting the uncertainty leading up to finance minister Rachel Reeves’ budget announcement in November. Market participants are assigning a 63.4% likelihood to the Bank of England implementing a 25 basis point cut in borrowing costs at its upcoming meeting in March.