London equities experienced a significant decline, moving towards weekly losses. This downturn was driven by apprehensions regarding technology valuations and the Federal Reserve’s assertive approach, which unsettled global markets. Additionally, defense shares fell as indications of possible advancements toward peace in Ukraine emerged. As of 1222, the blue-chip FTSE 100 index fell 0.4%, erasing Thursday’s brief recovery, while the mid-cap FTSE 250 index dropped 0.6%, on pace to extend its losing streak to an eighth consecutive session.
Thursday’s global rally following chip bellwether Nvidia’s forecast proved short-lived as concerns about a potential AI bubble resurfaced, coupled with a mixed U.S. jobs report that left the prospects for Fed rate cuts uncertain. Both UK stock indexes are set to experience even greater weekly losses compared to those observed in April, a period marked by significant market turbulence following U.S. President Donald Trump’s extensive tariff announcements.
Aerospace and defence stocks fell 3.2% on the day to their lowest in three months, as investors monitored developments around a new U.S.-drafted plan to end the Russian war in Ukraine. Defence and engineering contractor Babcock opened a new tab, dropping 0.7% despite reporting a 19% increase in first-half profit and forecasting further growth this year. Banking stocks drifted lower by 0.7%, with heavyweights HSBC Holdings and Barclays dropping about 1%. Precious metal miners lost 3.6% as gold prices retreated more than 1%, while industrial metal miners declined 1.7% after copper prices sank to their lowest level in over two weeks.
The domestic economic data further contributed to the prevailing pessimism. In October, retail sales experienced a contraction, reflecting a decline in household sentiment. Concurrently, business growth faced stagnation as the PMI for November saw a decrease. Companies are currently anticipating the budget announcement scheduled for next week, during which finance minister Rachel Reeves is projected to introduce further tax increases. Among individual movers, fast-fashion retailer ASOS plunged 8.7% after the company forecast lower annual profit than analysts’ expectations.