17th Oct 2025 08:35
(Alliance News) - Stock prices in Europe traded sharply lower on Friday, with sentiment souring at the end of the week, and declines on the FTSE 100 were largely broad-based.
Share price falls were seen from banking to oil majors and retailers to drugmakers. But gold miner Fresnillo provided a small bright spark, adding 0.2% on a robust bullion price. Pearson rose on a well-received trading statement and Smiths Group climbed after selling a division.
The FTSE 100 index slumped 151.41 points, 1.6%, at 9,284.65. The FTSE 250 dropped 306.86 points lower, 1.4%, at 21,684.50 while the AIM All-Share gave back 8.73 points, 1.1%, to 781.16.
The Cboe UK 100 was down 1.6% at 928.49, the Cboe UK 250 shed 1.5% at 18,937.19 while the Cboe Small Companies fell 0.5% at 17,642.66.
In Paris, the CAC 40 was down 1.1%, while the DAX 40 in Frankfurt slumped 2.0%.
In China on Friday, the Shanghai Composite ended down 2.0%, the Hang Seng Index in Hong Kong shed 2.8%. Tokyo's Nikkei 225 fell 1.4%. Sydney's S&P/ASX 200 closed down 0.8%.
Sparking Friday's sell-off was US banking sector concerns.
"US equities took a hit yesterday, with the S&P500 regional banks sub-index plummeting 5% after two lenders (Zions and Western Alliance Bancorp) reported problems with loans associated with fraud. The contagion to other risk assets shows not only that markets are still sensitive to regional bank concerns (a legacy of SVB's 2023 collapse), but potentially to the broader credit market, which has been operating on exceptionally tight spreads over the past few months," analysts at ING commented.
Among shares on the decline in London were lenders Barclays, StanChart and NatWest, down 4.7%, 4.3% and 3.5%.
Consumer credit checking provider Experian lost 2.4%, while Scottish Mortgage Investment Trust, which counts a who's who of US tech firms among its portfolio, shed 2.7%.
The weak trade did not end there. The FTSE 100's largest listing AstraZeneca gave back 1.1%. Asia-focused insurer Prudential, meanwhile, lost 2.3%.
Sentiment in markets had already been tempered this week by US-China trade tensions.
"Naturally, it is quite unlikely that there will be any major news or breakthroughs in the next two weeks before Donald Trump and Xi Jinping meet. If an agreement is reached, the announcement would certainly be kept under wraps until that moment," Commerzbank analyst Volkmar Baur commented.
"However, it is far from clear that an agreement will be reached, even though the markets currently seem to assume that it will. Not only do the two sides disagree on who started it this time (the other side, of course), but they also seem to be fairly certain that it is the other side that needs a deal much more than they do."
China on Thursday accused the US of deliberately creating panic through allegations by US administration officials concerning the imposition of export controls by Beijing.
The US interpretation seriously distorted and exaggerated China's measures, deliberately creating unnecessary misunderstanding and panic, Trade Ministry spokeswoman He Yongqian said in Beijing.
On Wednesday, US Trade Representative Jamieson Greer described Beijing's controls on the export of rare earths as "nothing more than a global supply chain power grab."
In New York on Thursday, the Dow Jones Industrial Average lost 0.7%, the S&P 500 fell 0.6% and the Nasdaq Composite declined 0.5%.
The yield on the 10-year US Treasury narrowed to 3.94% on Friday morning, from 4.03% at the time of the London equities close on Thursday. The 30-year yield slimmed to 4.56% from 4.62%.
A top contender to run the US Federal Reserve threw his support on Thursday behind a quarter-point rate cut later this month, claiming he believes inflation will soon cool.
Speaking in New York, US Fed Governor Christopher Waller said that economic conditions were such that policymakers should focus their attention on the softening labour market instead.
"Tariffs have modest effects on inflation, but with underlying inflation close to our goal and expectations of future inflation well anchored, I believe we are on track toward the FOMC's 2% goal," Waller said, referring to the rate-setting Federal Open Market Committee.
"As a result, my focus is on the labour market, where payroll gains have weakened this year and employment may well be shrinking already," he added.
Sterling traded at USD1.3431 early Friday, flat from USD1.3429 late Thursday afternoon. The euro perked up to USD1.1699 from USD1.1671. Against the yen, the dollar declined to JPY149.52 from JPY150.83.
A barrel of Brent fell to USD60.55 early Friday, from USD61.70 at the time of the London equities close on Thursday. Gold traded at USD4,343.09 an ounce, up from USD4,270.73 late Thursday afternoon in London.
Gold had set yet another record high on Thursday. It traded above the USD4,380 mark. It had set record highs every day this week ahead of Friday. Its best level of the day so far is just above USD4,378 an ounce.
Shell and BP tracked oil lower, meanwhile, declining 2.0% and 1.2%.
Pearson shares rose 2.9%. It said it remains on track to meet 2025 market expectations after reporting a pick-up in sales growth during the third quarter, driven by growth of its Virtual Learning segment.
The London-based education publisher said underlying group sales rose 4% year-on-year in the third quarter, taking growth for the first nine months of 2025 to 2%. Pearson said it expects stronger sales growth in the fourth quarter due to "known business unit dynamics."
Smiths added 0.6%. It agreed to sell its Smiths Interconnect division to Molex Electronic Technologies Holdings, part of Wichita, Kansas-based Koch, at an enterprise value of GBP1.3 billion.
Chief Executive Roland Carter said: "This is an important step as we deliver on our commitment to focus Smiths and unlock the inherent value in our business. Today's announcement, and our recent results, show we are delivering on our strategy with pace and purpose." The Interconnect division provides items such as cabling products and connectors.
Elsewhere in London, Steppe Cement added 9.4%. The cement producer in Kazakhstan said revenue in the third-quarter shot up 21% on-year in tenge terms.
Sales volumes improved 13% and pricing increased 7%.
Friday's global economic diary has eurozone consumer prices at 1000 BST.
Industrial production figures published by the Fed were on the docket for Friday, but will not be published as it incorporates a "a range of data from other government agencies", the central bank explained last week.
By Eric Cunha, Alliance News news editor
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