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The FTSE 100 closed sharply lower on Friday, although it was well above early lows as investors anticipated Thursday’s sharp decline. wall Street This situation arose due to fears regarding American regional banks.
The FTSE 100 index fell 81.52 points, 0.9%, to 9,354.57. Earlier it was trading at a low of 9,276.91.
The FTSE 250 fell 208.40 points, 1.0%, to 21,782.96. Objective The All-Share fell 17.24 points, 2.2%, to 772.65.
For the week, the FTSE 100 was down 0.8%, the FTSE 250 was 0.1% lower, and the Aim-All share fell 1.7%.
Wall Street fell Thursday and shares of regional banks fell after Zions Bancorp and Western Alliance said they were victims of fraud on loans made by funds investing in distressed commercial mortgages.
Zions Bancorp said it would take a $50 million (£37 million) charge related to loans issued by its California Bank and Trust division, while Western Alliance said it had started legal proceedings over bad loans.
“While everyone is keeping an eye on the tech sector for signs of a bubble, it is the banking sector that is the root cause of the modest market selloff today,” said. juice moldInvestment Director at AJ Bell.
Mr Mold said “pockets” of the US banking sector, including regional banks, had caused the market to worry.
“This includes Zions marking unexpected losses on two loans and Western Alliance accusing a borrower of committing fraud,” he said.
But he said the return to UK-listed banks would be “sentiment-driven”.
“Investors have been spooked and have moved to reduce their positions in the region, potentially opting to invest less should a crisis arise. There is no evidence of any problems with core banking names listed in London, but investors often react strongly when problems emerge elsewhere in the region,” he said.
barclays It fell 5.7%, while Standard Chartered fell 3.5% and HSBC fell 2.5%. Lloyds Banking Group and NatWest closed down 2.4% and 2.9% respectively.
ICG, which has exposure to private debt and asset-backed finance, fell 5.5%.
Stocks were lower in New York at the time of London close. The Dow Jones Industrial Average was down 0.1%, the S&P 500 was 0.3% lower, while the Nasdaq Composite fell 0.6%.
Zions shares were up 2.5% at the close of the London equity market, while Western Alliance shares were up 0.9%, although both were well off early highs.
There were also major declines among gold miners in London as the price of the yellow metal retreated from record highs.
On Friday, gold traded at $ 4,242.28 an ounce, which was at $ 4,270.73 on Thursday.
The latest volatility saw Fresnillo down 11% and Endeavor Mining down 5.5%.
At the close of the London equities market on Friday, the pound fell to $1.3398, down from $1.3429 on Thursday.
The euro stood at $1.1664, lower than $1.1671. The dollar was trading at 150.31 yen against the yen, lower than 150.83 yen.
The yield on US 10-year Treasuries was reported at 4.00%, down from 4.03% on Thursday. The yield on the US 30-year Treasury was 4.60%, down from 4.62% on Thursday.
In European equities on Friday, the CAC 40 in Paris closed 0.2% lower, while the DAX 40 in Frankfurt slipped 1.7%.
Bucking the weak trend in London, Pearson rose 2.3% as it said it was on track to meet market expectations for 2025 after reporting a surge in sales growth during the third quarter, driven by the growth of its virtual learning segment.
The London-based educational content publisher said underlying group sales rose 4% year-on-year in the third quarter, bringing growth to 2% in the first nine months of 2025. Pearson said it expected strong sales growth in the fourth quarter due to “recognized business unit dynamics.”
Chief executive Omar Abbosh said Pearson was “well positioned for the opportunities ahead”.
Smiths Group climbed 1.7% after announcing the sale of Smiths Interconnect to Molex Electronic Technologies Holdings, part of Wichita, Kansas-based Koch Industries, at an enterprise value of £1.3 billion.
The London-based engineering group said the sale price for its electronic connectors business represents 15.1 times core earnings of £86.1 million before interest, tax, depreciation and amortization for the financial year 2025, which ended July 31.
Analysts at Jefferies said it was a “good price” and “an important milestone in the group’s strategy to unlock value across its portfolio of businesses”.
Despite Friday’s decline, Morgan Stanley said it remains positive on UK equities from a European equity strategy perspective.
“Our call is less about UK macro, and more about the increasing levels of attractive UK equities, bottom-up drivers, increased investor interest from relatively low levels this year and the added benefit of the market’s low beta,” the bank said.
Morgan Stanley said investor interest in the UK is rising from relatively low levels, while some of the “more challenged” parts of the UK equity market (discretionary, rate sensitive) are also beginning to find relief as expectations grow that the 26 November Budget will be “less bad than feared” for equity and rate markets.
“UK equities are low beta, thinly owned and full of niche drivers,” the broker said.
Brent oil was trading at $60.03 per barrel, down from $61.70 late Thursday.
The biggest risers on the FTSE 100 were Pearson, up 25.5 pence at 1,119.5p, Halon, up 6.7p at 351.8p, Reckitt Benckiser, up 106.0p at 5,910.0p, Coca-Cola HBC, up 62.0p at 3,556.0p and Smiths Group, up 106.0p. 40.0p at 2,406.0p.
The biggest fallers on the FTSE 100 were Fresnillo, down 276.0p at 2,352.0p, Barclays, down 21.45p at 357.8p, ICG, down 113.0p at 1,929.0p, Endeavor Mining, down 194.0p at 3,356.0p, and Antofagasta, down 124.0p 2,663.0p But.
Monday’s global economic diary looked at retail sales and industrial production in China.
Inflation reports are due in the US, UK, Japan and Canada at the end of the week.
Next week’s UK corporate calendar will see third-quarter results from lenders Barclays, Lloyds Banking Group and NatWest plus consumer goods groups Unilever and Reckitt Benckiser.
Contributed by Alliance News.