London stocks closed in the red on Friday, as a selloff in bond markets spooked investors.
The FTSE 100 ended the session down 2.53% at 6,483.43, and the FTSE 250 was 1.36% weaker at 20,910.37.
Sterling was in negative territory as well, last trading 0.35% weaker on the dollar to $1.3966, and slipping 0.03% against the euro to 1.1509.
“From the look of afternoon trading in Europe and the opening moves in the US, it is clear that very few investors are willing to step up and buy the dip, at least for the time being,” said IG chief market analyst Chris Beauchamp.
“It is nearly the end of the week, and indeed the month, and, human nature being what it is, mostly people will have decided that the prudent course is to keep trimming back on risk and wait to see how things pan out next week, rather than jump in and spend the weekend fretting about new positions.”
Beauchamp said the story was the same in both London and on Wall Street, with miners, oil stocks and financials bearing the brunt of the selling, which he described as a breakdown in some of the key leaders of recent weeks and a sign that the market selloff was gathering some serious momentum.
“Barring the air pocket in late January this is the most serious move to the downside in months – not since the see-saw movement of September and October have we seen such a serious drop.
“This is a healthy move over the long-term, but will not be very pleasant for any latecomers to the global rally.”
Sentiment took a knock after the yield on the 10-year US Treasury note briefly spiked above 1.6% on Thursday for the first time in more than a year, before retreating back under 1.5%, amid expectations of higher inflation.
In equity markets, miners were under the cosh, with Anglo American down 6.13%, Glencore off 4.69%, Antofagasta losing 3.41%, and Rio Tinto 4.52% lower.
Rightmove was 6.73% weaker as it reported a drop in full-year profit as revenue took a hit after it gave discounts to customers during the coronavirus pandemic.
RSA Insurance nudged 0.12% lower even as it posted a 15% rise in full-year operating profit to £751m ahead of its £7.2bn takeover by Denmark’s Tryg and Canada’s Intact Financial.
On the upside, British Airways and Iberia owner IAG flew 3.06% higher despite swinging to a massive 7.4bn annual operating loss and pulling guidance for 2021, reflecting the impact of the Covid-19 crisis.
The loss compared with a profit of 2.61m a year ago.
Airlines more generally were on the rise, with easyJet and Wizz Air both in the black by 1.54% and 0.19%, respectively, perhaps buoyed by the prospect of EU vaccine passports.
Pets at Home rallied 2.98% as it upgraded its full-year outlook after a strong fourth quarter.
FTSE 100 (UKX) 6,483.43 -2.53%
FTSE 250 (MCX) 20,910.37 -1.36%
techMARK (TASX) 3,933.42 -1.81%
FTSE 100 – Risers
International Consolidated Airlines Group SA (CDI) (IAG) 191.95p 3.06%
Reckitt Benckiser Group (RB.) 6,000.00p 0.84%
Kingfisher (KGF) 265.40p 0.61%
RSA Insurance Group (RSA) 675.40p -0.12%
NATWEST GROUP PLC ORD 100P (NWG) 184.20p -0.38%
Flutter Entertainment (FLTR) 13,825.00p -0.43%
B&M European Value Retail S.A. (DI) (BME) 546.40p -0.44%
Lloyds Banking Group (LLOY) 39.00p -0.54%
Admiral Group (ADM) 3,088.00p -0.61%
Informa (INF) 550.80p -0.76%
FTSE 100 – Fallers
Rightmove (RMV) 565.00p -6.77%
Anglo American (AAL) 2,772.50p -6.13%
British Land Company (BLND) 489.60p -5.77%
Scottish Mortgage Inv Trust (SMT) 1,135.00p -5.10%
Imperial Brands (IMB) 1,333.00p -4.79%
Glencore (GLEN) 290.70p -4.69%
Evraz (EVR) 571.00p -4.58%
Rio Tinto (RIO) 6,187.00p -4.52%
Intermediate Capital Group (ICP) 1,731.00p -4.42%
Hikma Pharmaceuticals (HIK) 2,236.00p -4.40%
FTSE 250 – Risers
FirstGroup (FGP) 90.00p 3.15%
Pets at Home Group (PETS) 394.40p 2.98%
Biffa (BIFF) 255.00p 2.41%
Watches of Switzerland Group (WOSG) 638.00p 2.08%
Inchcape (INCH) 709.00p 2.01%
Genus (GNS) 5,035.00p 1.72%
Airtel Africa (AAF) 79.00p 1.66%
easyJet (EZJ) 985.60p 1.48%
Signature Aviation (SIG) 399.40p 1.47%
Centrica (CNA) 53.28p 1.46%
FTSE 250 – Fallers
Aston Martin Lagonda Global Holdings (AML) 2,008.00p -6.04%
Edinburgh Worldwide Inv Trust (EWI) 351.00p -6.02%
Ferrexpo (FXPO) 335.20p -5.47%
Baillie Gifford US Growth Trust (USA) 324.00p -5.26%
Centamin (DI) (CEY) 101.05p -5.12%
Allianz Technology Trust (ATT) 2,745.00p -5.02%
Meggitt (MGGT) 423.20p -4.66%
Cineworld Group (CINE) 98.16p -4.56%
Micro Focus International (MCRO) 418.60p -4.54%
Hochschild Mining (HOC) 215.00p -4.44%