London stocks fell sharply on Friday as nerves over US banks and worsening US-China tensions rippled through global markets.
The FTSE 100 dropped 1.6% to 9,284.65, the FTSE 250 slid 1.4% to 21,684.50, and the AIM All-Share lost 1.1% to 781.16, a broad sell-off across the board.
The slump followed a rough night on Wall Street. Two US regional lenders, Zions and Western Alliance Bancorp, reported loan issues tied to fraud, wiping 5% off the S&P 500’s regional banks index and reigniting fears of wider credit market stress. By the close, the Dow Jones was down 0.7%, the S&P 500 slipped 0.6%, and the Nasdaq fell 0.5%.
London’s banks were among the hardest hit. Barclays sank 4.7%, Standard Chartered 4.3%, and NatWest 3.5% as investors took risk off the table. Experian and Scottish Mortgage Investment Trust also lost ground, down 2.4% and 2.7% respectively.
Trade relations between Washington and Beijing is adding another layer of unease. China accused the US of “deliberately creating panic” after officials in Washington described Beijing’s export curbs on rare earths as a “global supply chain power grab.” With Donald Trump and Xi Jinping expected to meet later this month, markets remain sceptical that the rhetoric will cool anytime soon.
Oil majors joined the slide, with Shell down 2% and BP off 1.2% as Brent prices softened. AstraZeneca fell 1.1%, while Prudential dropped 2.3%, extending the index’s losses across most sectors.
Still, there were some pockets of strength. Pearson rose 2.9% after reporting stronger third-quarter sales and reaffirming its 2025 outlook. Smiths Group added 0.6% after agreeing to sell its Interconnect division to Koch-owned Molex for £1.3 billion. Fresnillo edged up 0.2% as gold prices firmed, and Steppe Cement jumped 9.4% on stronger third-quarter revenue.