FTSE 100 hits record high on Rolls‑Royce surge; tech lifts on Nvidia beat

FTSE 100 Record and Sector Movers

Feb 26 (Reuters) - Britain's FTSE 100 hit a record high on Thursday, lifted by Rolls-Royce after the engine maker raised its annual forecasts, while sentiment was also buoyed by optimism over AI following better-than-expected results from U.S. chip major Nvidia.

Rolls‑Royce Leads Gains

Rolls-Royce rose 4.9% and hit a record high after reporting a 40% jump in annual profit, driven by strong demand for its aero-engines and rising power needs from data centres. British aerospace and defence stocks rose to an all-time high following the results.

FTSE 250 Largely Unchanged

Index Levels and Monthly Performance

The blue-chip FTSE 100 index nudged 0.1% higher to 10,820 points as of 1023 GMT, while the domestically focused mid-cap FTSE 250 was largely unchanged.

February Outperformance and BoE Bets

The FTSE 100 has climbed 5.8% so far in February, on pace for its steepest monthly rise in a year and outperforming its U.S. and European peers, buoyed by investor bets on an additional Bank of England rate cut in March.

AI Tools and Business Model Disruption

Tech Focus After Nvidia Beat

Globally, tech stocks remain in focus as investors weigh how fast-advancing AI tools might disrupt established business models.

UK Tech Stocks Rise 0.8%

Nvidia projected first-quarter revenue ahead of expectations on Wednesday, lifting its shares by 1.5% in premarket trading. The UK's tech stocks rose 0.8%.

Corporate Updates Drive Moves

Investors also sifted through a slate of domestic corporate updates.

LSEG Buyback Plan Amid Activist Pressure

London Stock Exchange Group jumped 6.7% after announcing a share buyback plan at a time the company faces pressure from activist investor Elliott Management and battles concerns AI will squeeze its business model.

Hikma Signals Slower Revenue Growth

Hikma Pharmaceuticals fell 15.8% to a more-than-three-year low, sinking to the bottom of the benchmark index after the drugmaker forecast slower annual revenue growth.

HSBC Starts Singapore Life Business Sale

HSBC fell 1.5% a day after a near 8% climb following strong results. The lender has started the sale process for its Singapore life insurance product manufacturing business, and is hoping for the deal to be valued at more than $1 billion, sources told Reuters.

Political Backdrop: Manchester Vote

On the political front, Prime Minister Keir Starmer faces a big test on Thursday when voters in Manchester cast their ballots for a new lawmaker in an election polls say is too close to call between the British leader's Labour Party, populist Reform UK and the left-leaning Greens.

(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Leroy Leo)