Amid AI bubble worries, London’s FTSE is luring in American investors seeking greater diversification, writes Susannah Streeter in this week’s Notebook

FTSE basks in winter sunshine

January has been stormy in more ways than one – but the FTSE is shining in a big patch of winter sun. The blue-chip index has passed the 10,000 mark in footloose fashion, with the psychologically important level looking increasingly like the new floor. Even with this spurt of growth, the FTSE 100 can still be considered a value play, given that earnings expectations for the big, listed multinationals are far less stretched than those on other international indices, especially in the US.

It’s not surprising that UK stocks are providing more allure for American investors, in particular those seeking greater diversification from US tech giants amid AI bubble worries. It’s also been boosted by a share buyback trend, returning more value to shareholders.

But there are plenty of hazards ahead and there’s a reason for the surge in prices of mining and defence stock prices – the geopolitical risks hanging heavy in the air. These have hastened the search for safe havens, pushing up precious metal prices, while nations are expected to rapidly increase military budgets. The threats are real, and unpredictable especially with erratic policymaking from the White House. Given the instability across continents, a big shock cannot be ruled out, which would create a big bout of volatility. Although the........

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