FTSE 100 drops as Wall St mood soudains

London's FTSE 100 sank on Friday as a Wall Street sell-off fueled by?AI angst ruined the mood on European markets.

Blue-chip index FTSE 100? declined by 0.6% after a rise of up to 0.6%. The mid-cap FTSE 250 Index also retreated from its early highs, gaining 0.1%.

Both indices have recorded a second week of declines.

U.S. stock prices fell as Broadcom's recent results added to fears?about an AI bubble. This dampened optimism that was stoked by Federal Reserve's less-hawkish signals?on the direction of interest rates for 2026.

British stocks had been boosted earlier by an increase in precious metal miners, on the backs of a rise in gold and silver.

The FTSE 350 index, which includes?precious-metal miners, jumped 5% before cutting gains. It closed at just 0.8%.

Attention now turns to next week's Bank of England meeting on monetary policy. Markets have priced in a 90 percent chance of a rate cut of 25 basis points following signs of a cooling labor market and inflation.

The data released on Friday revealed that the British economy contracted unexpectedly during the three-month period ending in October. This loss of momentum in the fraught lead up to Finance Minister Rachel Reeves budget has further supported expectations for a rate reduction.

InterContinental Hotels Group rose 2% among stocks after Jefferies upgraded Holiday Inn's owner from "hold" to "buy".

Travel retailer WH Smith's shares fell by 2.1% after it delayed publishing its preliminary annual results a second time.

Card Factory fell 27.4% after the greeting cards and gift retailer warned that a 'drop in annual profits due to lower than expected UK store sales, and expectations of weak high street footfall continuing?over festive weeks.

Harbour Energy shares rose by 3.3% following the announcement that it would acquire Waldorf Energy Partnership and Waldorf Production, for $170 million. (Reporting and editing by Shash Kuber, Alex Richardson and Tharuniyaa lakshmi in Bengaluru.

(source: Reuters)