UK midcaps fall as AI disruption concerns hit wealth managers

Feb 11 (Reuters) - UK midcap stocks fell on Wednesday, with British wealth managers slumping as the sector became the latest casualty of fears of disruption by artificial intelligence, while LSEG shares rose following reports activist investor Elliott has built a stake.

The FTSE 250 index of domestically oriented companies .FTMC dipped 0.5% as of 1137 GMT, having closed on Tuesday at its strongest level in four years.

Shares of Aberdeen Group ABDN.L, Quilter QLT.L, IG Group IGG.L and AJ Bell AJBA.L fell in the range of 2.4% to 6%, tracking losses in their U.S. peers after wealth management startup Altruist introduced AI-enabled tax-planning features, fuelling fears over disruption to incumbents.

FTSE 100-listed St. James's Place SJP.L tumbled 10.7%.

The blue-chip FTSE 100 .FTSE, however, rose 0.7%, helped by miners and bank stocks.

London Stock Exchange Group LSEG.L rose 2% after media reports said activist investor Elliott Management has built a stake and is engaging with the financial data and analytics group to improve its performance.

In a busy day for corporate updates, investors were also looking to U.S. payrolls data later in the day. The report is expected to show a pickup in job growth in January.

Preliminary reading of UK's fourth-quarter GDP is due on Thursday, while December jobs data will be released next week. The Bank of England said last week that borrowing costs were likely to fall if an expected drop soon in inflation was sustained.

Among other movers, London-listed miners Rio Tinto RIO.L and Anglo American AAL.L rose 2.5% each, as copper prices climbed on a weaker dollar. MET/L

Barratt Redrow BTRW.L fell 5.5% after the home builder reported a 13.6% decline in first half adjusted pre-tax profit amid subdued demand in the industry.