The FTSE 100 posted its worst weekly performance since August amid a mix of economic and geopolitical issues.
In a dismal day of trading, the blue-chip index fell 1.3 percent, or 97.39 points, to 7,402.14 and the FTSE 250 fell 1.1 percent, or 180.41 points, to 17,032.73.
That brings the FTSE 100’s losses to around 2.5 percent this week, the biggest decline since the 3.5 percent loss in the week to August 18.
The selloff came as investors worried about the war in the Middle East and the possibility that interest rates could remain higher for longer.
Richard Hunter, head of markets at Interactive Investor, said many traders were reluctant to take new positions “ahead of a weekend where hostilities could worsen.”
Losses: On a dismal day of trading, the blue-chip index fell 1.3 percent, or 97.39 points, to 7,402.14
He added: “At the same time, investors were somewhat confused by comments from Federal Reserve Chairman Jay Powell, who seemed to waver between suggesting no further rate hikes in the near future or leaving the door open for future rate hikes should circumstances change require this.”
“Given the recent pressure on markets, investors had been hoping for a final confirmation that the rate hike cycle was over and were therefore disappointed by the comments.”
The IPO on the London Stock Exchange was quieter after an incident on Thursday that brought trading to a halt in hundreds of smaller stocks.
Investors headed to safe havens like gold, which hit a three-month high as Israel moved closer to invading Gaza.
As a result, Endeavor Mining rose 4.4 percent, or 74 pence, to 1,760 pence.
Ingredients maker Treatt is looking for a chief executive after its long-time boss announced his resignation. Daemmon Reeve has been with the company for 32 years and has been in charge for more than a decade. He will leave the company at the end of this year and Treatt’s chief financial officer Ryan Govender will take over until a permanent appointment is made. Shares were unchanged at 430p.
Rentokil returned to positive territory in early trading, a day after the pest control company warned of weaker demand in North America. But shares, which fell 18.6 percent on Thursday, eventually fell again, falling 4.1 percent, or 19.7 pence, to 464.2 pence.
Mobico – the company behind National Express – made gains after German state railway group Deutsche Bahn agreed on Thursday to sell British bus and train operator Arriva to private equity firm I Squared.
Gerald Khoo, an analyst at investment bank Liberum, said the deal shows that “there is still clear interest among infrastructure investors in acquiring public transport operators.”
He added: “Given Mobico’s current low share price, we think the analogy is particularly relevant.”
Shares rose 8.5 percent, or 4.8 pence, to 61.3 pence.
AIM-listed ITM Power has completed the sale of its joint business with Dutch energy company Vitol to the net-zero investment firm founded by entrepreneur Jo Bamford.
The pair founded Motive Fuels in March last year to develop and launch hydrogen fueling stations in the UK.
It has been sold to HYCAP Group, meaning ITM will use the £28m earmarked for the joint business for other projects. Shares fell 4.7 percent, or 3.28 pence, to 66.48 pence.
Scancell again delayed publishing its results. The clinical-stage biopharmaceutical company was scheduled to report its annual results on October 12, but postponed it until next Tuesday at the request of its auditor. And while BDO insisted there were no “significant audit issues”, the company said its results for the year to the end of April were still ongoing. Shares fell 3.6 percent, or 0.5 pence, to 13.5 pence.