UK’s FTSE 100 fell for its third straight session on Friday, dragged down by financials and mining stocks, in a volatile week dominated by fears about escalation of the Middle East conflict and worries about further monetary policy tightening.
The main FTSE 100 index closed 1.3% lower, posting its worst weekly performance in two months.
Financial stocks were a big drag, with HSBC and Prudential falling 3.9% and 3.4%, respectively.
Industrial metal miners eased 3.1%, leading sectoral declines as copper prices were hurt by a stronger dollar, sluggish global growth and lack of additional stimulus in top metals consumer China.
The FTSE 250 index shed 1.1%, ending its fifth consecutive week down.
Weighing on global risk assets, the 10-year U.S. benchmark yield briefly touched 5% overnight after Federal Reserve Chair Jerome Powell said stronger-than-expected U.S. economic activity might warrant tighter financial conditions.
Interest rate-sensitive real estate stocks slipped 0.3%, hitting their lowest level since September 2022.
Meanwhile, data showed British retail sales fell more than expected in September.
“Rising prices and broader cost-of-living pressures have prompted consumers to cut back on non-essential shopping,” said Victoria Scholar, head of investment at interactive investor.
“Today’s figures highlight the sluggish consumer backdrop that is contributing to a weak economy.”
Another set of data showed British consumer confidence tumbled in October after rising to its highest since the start of 2022 in September, reflecting renewed concerns about the strength of the consumer.
IHG said it expected to close out 2023 with “very strong” financials as the Holiday Inn owner reported a rise in quarterly revenue per room on strong travel demand. However, shares fell 4.5% on slower quarterly net unit growth.
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