14th Nov 2025 12:14
(Alliance News) - Stock prices in London were lower at midday on Friday, extending early losses as UK fiscal concerns and rising gilt yields weighed heavily on sentiment.
The FTSE 100 index was down 161.74 points, 1.7%, at 9,646.08. The FTSE 250 was down 332.13 points, 1.5%, at 21,663.28, and the AIM All-Share was down 10.34 points, 1.4%, at 745.12.
The Cboe UK 100 was down 1.7% at 963.54, the Cboe UK 250 was down 1.7% at 18,753.69, and the Cboe Small Companies was down 1.2% at 17,619.93.
Speculation that the UK chancellor has scrapped plans to raise income tax triggered a sell-off in UK government bonds, as markets grew nervous about unfunded spending pledges ahead of the November 26 budget.
Britain's long-term borrowing costs surged, with 30-year gilt yields jumping as much as 14 basis points in early trade, while 10-year yields climbed 12 basis points, the sharpest rise since July.
Bond prices move inversely to yields, meaning higher yields reflect a fall in prices. Yields later eased slightly, with 30-year gilts seven basis points higher at 5.3% and 10-year gilts up six basis points at 4.5%.
Kathleen Brooks, research director at XTB, said the budget speculation "means the chancellor has signalled billions of unfunded spending pledges, which the bond market is not fond of".
She added: "Bond market volatility is not what the chancellor wants to see with less than two weeks to go before the budget."
In European equities on Friday, the CAC 40 in Paris was down 1.3%, while the DAX 40 in Frankfurt fell 1.4%.
Eurozone economic growth picked up in the third quarter as expected, Eurostat confirmed. GDP rose 0.2% quarter-on-quarter, matching the prior estimate and up from 0.1% growth in the second quarter.
Year-on-year, growth eased to 1.4% from 1.5%, though revised up from the earlier 1.3% estimate.
Eurostat also reported eurozone employment grew 0.1% in the third quarter, matching second-quarter momentum.
Separately, the bloc's trade surplus widened sharply to EUR19.4 billion in September from EUR1.9 billion in August, boosted by a jump in the chemicals surplus.
"This notable growth was primarily driven by a significant rise in the chemicals surplus, which surged from EUR17.9 billion in August 2025 to EUR29.1 billion in September 2025," Eurostat said.
Compared to a year prior, the surplus rose from EUR12.9 billion.
The pound was quoted at USD1.3137 at midday on Friday in London, down from USD1.3197 late Thursday. The euro stood at USD1.1616, down from USD1.1644. Against the yen, the dollar traded at JPY154.65, higher versus JPY154.31.
Stocks in New York were called lower. The Dow Jones Industrial Average was seen down 0.5%, the S&P 500 down 0.7%, and the Nasdaq Composite down 1.1%.
The yield on the US 10-year Treasury was quoted at 4.13%, widening from 4.07%. The yield on the US 30-year Treasury was quoted at 4.74%, widening from 4.67%.
Only two FTSE 100 constituents - Diageo and DCC - traded in the green.
Financials were the biggest drag, with St James's Place down 4.4%, Lloyds down 3.9%, NatWest off 3.7%, Barclays down 3.5% and Standard Chartered down 2.7%.
Supermarket Income REIT slipped 1.3% after acquiring a portfolio of 20 Carrefour supermarkets in France for EUR123 million, with a weighted average lease term of 12 years.
BHP Group fell 3.5% after vowing to appeal an English High Court ruling that found it liable in relation to the 2015 Fundao dam disaster at Samarco, its joint venture with Vale. Any damages will be assessed in trials expected to run through 2028 or 2029.
The tailings dam was operated by Samarco Mineracao SA, a 50-50 joint venture of BHP and Vale SA.
The decision by the English High Court follows a five-month first-stage trial of the UK group action, BHP said in a statement on Friday.
Any assessment of damages will be determined in second and third stage trials expected to be completed in 2028 or 2029, the miner said.
BHP stated that it believes the UK group action is "duplicative of remediation and compensation" that have already occurred in Brazil.
On the FTSE 250, Man Group fell 1.9% on the day the Financial Times reported plans to cut London middle-office roles and shift hiring to Bulgaria.
Among smaller caps, WH Ireland jumped 22%, extending Thursday's surge after the firm received an indicative all-share proposal from Team. Team has until December 10 to submit a firm bid.
Brent oil was quoted at USD64.44 a barrel at midday in London on Friday, up from USD63.14 late Thursday.
Gold was quoted at USD4,155.20 an ounce, lower against USD4,206.40.
Still to come on Friday's economic calendar are Canada manufacturing sales.
By Eva Castanedo, Alliance News reporter
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