The FTSE 100 ended a strong week lower on Friday after once again setting a new all-time best, as investors locked in recent gains eyeing rising bond yields.
The FTSE 100 index closed down 29.22 points, 0.3%, at 10,868.05. The blue-chip index had earlier hit a new intra-day high of 10,989.45.
The FTSE 250 ended down 104.12 points, 0.4%, at 23,975.02, while the AIM All-Share closed down 2.35 points, 0.3%, at 762.55.
For the week, the FTSE 100 was up 1.2%, the FTSE 250 was 0.7% and the AIM All-Share was down 1.2%.
Trading got off to a bright start in London on Friday with the blue chip index threatening to surpass the 11,000 milestone but gains evaporated as the day wore on.
NatWest led the risers, up 3.2%, as it raised guidance for 2026 and said it will consider a new share buyback at its annual results, six months earlier than planned, after profit and income beat expectations in the second quarter.
AJ Bell investment director Russ Mould noted this was the fifth time NatWest has beaten consensus forecasts since the Government sold its remaining stake last May.
“The company’s ability to consistently outmatch expectations has undoubtedly been helped by an environment in which interest rates have stayed higher for longer, but the business has also benefited from its own strategic initiatives,” he added.
But IG Group plummeted 14%, the worst FTSE 100 performer, as investors weighed its 1.3 billion dollar acquisition of US fantasy sports and prediction markets operator Underdog.
The deal came as the London-based online trading platform said late on Thursday that total revenue for the first six months of 2026 increased 18% to £642.8 million from £545.2 million a year prior.
Elsewhere, J Sainsbury rose 1.0% as it said it had agreed to sell its Argos business for £120 million, significantly less than it had paid for the company, in order “to fully focus on its core food business”.
The London-based grocer is divesting the brand, which includes its homeware offering, to Swift Partners.
In a research note, JPMorgan analyst Borja Olcese noted Argos has long been an overhang for Sainsbury, and has typically been a driver of the difference between its and peer Tesco’s valuations.
Away from corporate news, investor eyes were on rising bond yields as two Federal Reserve policymakers who dissented from the central bank’s decision to keep interest rates steady earlier this week said that rate hikes were needed now in order to avoid entrenched inflation.
The yield on the US 10-year Treasury stretched to 4.74% on Friday from 4.67% on Thursday. The yield on the US 30-year Treasury widened to 5.27% from 5.21%.
In London, the yield on 10-year gilts jumped to 5.05% from 4.99% at the same time on Thursday.
The Fed held rates at 3.50-3.75% for its fifth straight meeting on Wednesday, with three of the committee’s 12 members dissenting in favour of a quarter-percentage-point rate hike.
“Inflation has been too high for too long,” said one of the dissenters, Beth Hammack, president of the regional Cleveland Fed, in a statement. “The longer that high inflation persists, the more challenging and costly it can be to bring it back down.”
Neel Kashkari, the president of the Minneapolis Fed, who dissented alongside Ms Hammack, said in a statement that he thought it was necessary to “tighten policy incrementally as we gather more data on the path of inflation and employment”.
“If inflation remains elevated, in my view, a potential series of small policy moves would be better than waiting and eventually concluding that even bolder actions were necessary,” he said.
The pound traded at 1.3463 dollars on Friday afternoon, up from 1.3439 at the equities close on Thursday. Against the euro, sterling rose to 1.1702 euro from 1.1671.
John Healey said he will deliver his first budget as Chancellor on October 28, pledging to move “money and power out of Westminster”.
He said the budget would “meet our fiscal rules” and “give businesses and families some of the stability they need to plan for the future”.
In European equities on Friday, the CAC 40 in Paris closed up 0.3%, while the DAX 40 in Frankfurt ended up 0.1%.
Stocks in New York were mixed. The Dow Jones Industrial Average was up 0.2%, while the S&P 500 index and the Nasdaq Composite were flat.
It was another day of diverging fortunes for two of Wall Street’s leading names. Apple was on the back foot after warning that supply constraints and forex headwinds will temper revenue growth in the September quarter, but Amazon surged after strong results.
Apple, which makes the iPhone and iPad, was 9.3% lower after the warning, which came after results which beat expectations. The earnings were the last to be overseen by Chief Executive Tim Cook, who is stepping down in September after 15 years at the helm.
Amazon, meanwhile, soared 13% as it reported “booming” sales at its cloud business, Amazon Web Services.
“AWS is booming, growing 36.7% year-over-year in Q2 – our fastest growth in 18 quarters – and our AI and Chips businesses each eclipsed run rates of more than 25 billion dollars,” said Andy Jassy, chief executive.
“Amazon’s Q2 print was exactly what bulls wanted,” remarked analysts at RBC Capital Markets.
Back in London, Greggs was the worst FTSE 250 performer, falling 7.5%.
RBC cut the baker to ‘sector perform’ from ‘outperform’. It snaps a five-day winning streak for the stock, which included an 18% surge on Wednesday.
Housebuilder Taylor Wimpey fell 4.5%, as it slashed its dividend and lowered its shareholder return policy.
The High Wycombe-based housebuilder now expects annual returns to amount to 4% of net assets, cut from the previous level of around 7.5%. The new target will comprise a minimum of 2% as an ordinary dividend, together with a further 2% returned either via dividends or share buybacks.
The biggest risers on the FTSE 100 were NatWest, up 22.0p at 705.8p, Polar Capital Technology Trust, up 15.0p at 626.5p, Pershing Square Holding, up 88.0p at 3,808.0p, Metlen Energy, up 1.0p at 46.2p and BAE Systems, up 44.0p at 2,094.0p.
The biggest fallers on the FTSE 100 were IG Group, down 246.0p at 1,460.0p, Melrose Industries, down 20.9p at 454.3p, JD Sports, down 3.8p at 89.4p, Experian, down 108.0p at 2,790.0p and Informa, down 28.0p at 885.8p.
Monday’s economic calendar has a slew of manufacturing PMI releases.
Next week’s UK corporate calendar has results from Asia-focused bank HSBC, oil major BP and Guinness owner Diageo.
Contributed by Alliance News
