London stocks opened sharply lower on Friday as a global sell-off rolled through markets and fresh UK fiscal jitters soured the mood.
The FTSE 100, already down 1.4% on Thursday, fell another 1.1% at the open to 9,699.55. The FTSE 250 slipped 1.1% to 21,745.49 and the AIM All-Share lost 0.9% to 748.77.
The blue-chip index, which only days ago was setting fresh record highs, has now surrendered a chunk of those gains. Banks, miners and housebuilders, the strongest performers on the way up, have been hit hardest on the way back down.
The pressure builds on a global backdrop that turned sharply negative on Thursday. Wall Street saw one of its roughest sessions in weeks, with the Dow and S&P 500 both dropping 1.7% and the Nasdaq tumbling 2.3%. Asian markets followed suit overnight, leaving Europe to pick up the selling baton this morning.
Layered on top of that, UK fiscal nerves resurfaced after reports that Chancellor Rachel Reeves has abandoned plans to break Labour’s manifesto pledge and raise income tax in this month’s budget. The move had been expected to help plug a sizeable gap in public finances. Dropping it raises questions about how the government now plans to fund its spending priorities without resorting to deep cuts.
Land Securities was the biggest FTSE 100 faller, down 3.4% after half-year pretax profit dropped to £98 million from £243 million. Losses on disposals offset stronger rental income, though EPRA earnings and occupancy both improved.
Melrose Industries managed to buck the trend, up 0.8% after reporting a strong performance through October and reiterating upgraded full-year guidance.
On the FTSE 250, PPHE Hotel Group jumped 11% after major shareholders Eli Papouchado and Boris Ivesha said they are exploring strategic options, including bringing in new investment or partially monetising their stakes.
Among smaller caps, WH Ireland climbed another 19% after receiving an indicative takeover proposal from Team PLC earlier in the week.
European markets also opened weaker, with the CAC 40 down 0.4% and the DAX 40 off 0.7%, while Asia saw heavy selling across Tokyo, Hong Kong and Shanghai.
Wall Street’s slump has raised concerns that the story behind this year’s strong rally is shifting, with investors starting to question whether the soft landing narrative still holds.