The FTSE 100 retreated from recent all-time highs on Thursday, hit by weak economic data, mixed earnings and a group of index heavyweights missing out on dividends.
The FTSE 100 index closed down 103.74 points, or 1.1%, to 9,807.68.
The FTSE 250 closed 139.81 points lower, or 0.6%, at 21,995.51, and the AIM All-Share fell 7.70 points, or 1.0%, to 755.46.
Figures showed UK GDP grew just 0.1% in the third quarter, slowing growth from 0.3% in the previous quarter, with September GDP falling 0.1%.
The quarterly reading missed the consensus forecast cited by FXStreet for 0.2% growth and marked the final reading before Chancellor Rachel Reeves delivers her budget later this month.
Goldman Sachs noted that September's drop was due to a sharp contraction in auto industry production following the cyberattack on Jaguar Land Rover.
Peel Hunt's Kallum Pickering said the data reinforces his claim that the Bank of England will cut rates by 25 basis points to 3.75% at its December meeting.
He also struck a note of hope ahead of the Budget which is expected to contain significant tax increases.
“As long as Chancellor Rachel Reeves delivers a disinflationary mix of tax rises (which looks likely), falling inflation should open the door for benchmark interest rates to fall substantially as the Bank of England eases monetary policy. Tax rises alone will slow growth. However, lower rates can be a powerful offset,” he said.
Sterling was trading at $1.3197 at the close of the London Stock Exchange on Thursday, up from $1.3134 on Wednesday.
The euro stood at $1.1644, down from $1.1592. Against the yen, the dollar was trading lower at 154.31 yen, down from 154.74 yen.
In European equities on Thursday, the CAC 40 in Paris closed down 0.1%, while the DAX 40 in Frankfurt fell 1.4%.
In New York, markets were down.
The Dow Jones Industrial Average was down about 0.8% at the London close. The S&P 500 index was down 1.1%, while the Nasdaq Composite was down 1.7%.
The 10-year US Treasury yield stood at 4.11%, down from 4.07% on Wednesday. The 30-year US Treasury yield was quoted at 4.69%, widening from 4.67%.
On the FTSE 100, pharmaceutical company GSK, down 0.6%, oil majors BP and Shell, down 1.7% and 1.6% respectively, plus grocer J Sainsbury, down 4.2%, were among shares trading ex-dividend, holding back the blue-chip index.
Also in the red is Grupo 3i, which plunged 17% after revealing weaker-than-expected trading in its main investment stock.
Citi analyst Andrew Lowe said Action's latest sales figures imply roughly no growth in October, “significantly” below his estimate.
“We hope this results in significant disappointment,” he added.
RBC Capital Markets said it believes operations in France, a third of Action's sales, were “significantly” worse in October and categories such as décor, home and toys, which performed very well last year, were softer this year.
Aviva also struggled, falling 6.2%, after announcing third quarter results and a series of new financial targets.
RBC Capital Markets analyst Mandeep Jagpal called it a “solid” update with new group-level targets broadly in line with the Visible Alpha consensus.
“However, with investors' expectations high heading into the event, we expect there may be some weakness in stocks today,” he added.
Aviva is targeting topline cost synergies almost double its original estimate, and now expects £225m in run-rate savings by 2028. Aviva is eyeing a further £500m in capital synergies by the end of 2026.
But operating profit growth targets fell short of analyst expectations, implying some downside to the consensus.
UBS said implied growth targets suggest operating earnings per share of 75p by 2028 versus the Visible Alpha consensus of 80p and operating profit of £2.8bn, 9% below the consensus of £3.1bn.
Convatec rose 5.1% as it said it is on track to meet full-year guidance and the company expects “double-digit” profit growth in 2026.
While Endeavor Mining benefited from another rise in the price of gold and its third quarter trading update.
The gold miner, which closed up 5.9%, said it expects to announce in early 2026 a new shareholder return program for 2026 to 2028, which will outline a “significant increase” in minimum dividend commitments to shareholders.
Gold traded higher on Thursday at $4,206.40 an ounce, up from $4,184.48 on Wednesday.
Brent oil rose to $63.14 a barrel at the close of the London Stock Exchange on Thursday, compared to $62.84 on Wednesday.
On the FTSE 250, Wizz Air flew high, up 6.7%, as it reported a rise in half-year sales and profits, while well-received trading updates boosted Keller and Qinetiq.
The biggest faller on the FTSE 250, Lancashire, down 9.3%, was another stock trading ex-dividend.
Elsewhere, online-only fashion retailer Asos soared 14% as it announced the completion of a refinancing ahead of its full annual results due next week.
Berenberg said he understands the new facilities have reduced the interest rate by several percentage points, reducing the cash interest cost by £5 million on an annualized basis.
“In our view, the early refinancing is a positive development under new CFO Aaron Izzard, and the lower interest rate reflects the operational progress made by the company to date,” the broker added.
The biggest risers on the FTSE 100 were Endeavor Mining, up 188.00p to 3,402.00p, Convatec, up 12.00p to 248.60p, Persimmon, up 41.00p to 1,274.00p, Fresnillo, up from 66.00p to 2,410.00p and DCC, up to 98.00p to 4,938.00p.
The biggest fallers on the FTSE 100 were 3i Group, down 709.00p to 3,360.00p. Aviva, down 42.60p to 653.90p, J Sainsbury, down 14.20p to 326.60p, WPP, down 12.20p to 286.50p and Entain, down 24.00p. at 727.40p.
Friday's global economic calendar includes a slew of data from China overnight, including industrial production and retail sales, eurozone GDP figures and a French CPI report.
Friday's UK corporate calendar includes half-year results from property company British Land and a trading update from aerospace engineering firm Melrose.
Contributed by Alliance News
