The FTSE 100 fell sharply on Friday amid concerns about US regional banks, which rocked global equity markets after several institutions warned of credit fraud risks.
London’s leading index was down 1.2% at the time of writing as investors rushed to reduce equity positions after the strong rally of recent months.
“It was an ugly session on Wall Street yesterday, as small gains gave way to an accelerating move to the downside on fears about the US regional bank system,” said Chris Beauchamp, Chief Market Analyst at IG.
“This feels like a rerun of 2023, but it comes as the market is struggling to digest the latest US-China trade spat and spells trouble in the short-term at least. Sentiment remains skittish, and the instinct will be to sell first and ask questions later.”
FTSE 100 banks and financials were heavily hit as a result on Friday. Asset manager ICG was the FTSE 100’s top faller as gyrations in financial markets capped a torrid week for the stock, with its uptrend disintegrating. ICG shares fell 6% on Friday, touching their lowest levels since June.
Barclays shares took a pasting and were trading 5% lower at the time of writing. Standard Chartered, Schroders, and St James’s Place were down around a similar amount.
“The pullback in UK-listed banks will be sentiment-driven. Investors have been spooked and moved to trim positions in the sector, possibly opting to have lower exposure in case a crisis is brewing,” explained Russ Mould, investment director at AJ Bell.
“There is no evidence of any issues with the London-listed core banking names, but investors often have a knee-jerk reaction when problems appear anywhere in the sector.”
Concerns about regional banks brought back memories of 2023’s volatility and forced investors into safe havens, extending this year’s meteoric rise in gold.
“Gold climbed above USD 4,380 per ounce on Friday, setting yet another record before easing slightly, as investors continued to favor the metal amid global uncertainty and growing expectations of further US monetary easing,” said Daniel Takieddine Co-founder and CEO, Sky Links Capital Group.
“Despite some profit-taking, bullion remains on track for its ninth consecutive weekly gain.”
Interestingly, precious metals miners Fresnillo and Endeavour Mining—the FTSE 100’s two best performers of 2025—were among the losers on Friday, reflecting risk aversion running through the market.
Pearson was the FTSE 100’s top riser after revealing that virtual learning helped sales growth in Q3.