The FTSE 100 closed down 21 points at 10,508 on Friday, ending the week on a weak note as global technology stocks continued their retreat.
Dip buyers entered US markets during the afternoon session, pushing the Dow Jones, S&P 500 and Nasdaq into positive territory after earlier losses weighed heavily on sentiment.
IG chief market analyst Chris Beauchamp said: “Dip buyers have come storming in this afternoon to steady the ship after the wave of selling of the last 18 hours.”
Beauchamp added that “the recovery is a testament to the staying power of this rally, but holding on to gains has proved problematic throughout the week.”
The energy sector was identified as the primary drag on London’s index, with BP falling nearly 2% and Shell losing more than 1% as Brent crude fell over 3% to $72 a barrel.
Tickmill market analyst Patrick Munnelly said the retreat in Brent and WTI crude toward levels last seen in late February was “undercutting the energy sector’s earnings momentum and removing one of the FTSE’s key supports.”
Mining stocks also came under pressure, with Antofagasta (LSE:ANTO), Anglo American, Glencore and Fresnillo (LSE:FRES) all falling more than 2% as the stronger dollar and global uncertainty weighed on the sector.
London’s defence stocks failed to rally despite reports that Prime Minister Keir Starmer is poised to commit at least £1 billion more for defence ahead of a long-delayed defence investment plan due next week.
QinetiQ fell 2.5%, Melrose Industries slipped 2.3% and Rolls-Royce lost 1.6%, with the sector under pressure partly because some figures had been hoping for as much as £2.5 billion in extra funding.
Heathrow Airport warned that profits would fall this year, cutting its passenger forecast to a base case of 83.6 million passengers, representing a 1.1% decline from 2025 and well below its previous estimate of 85 million for 2026.
The airport said adjusted EBITDA is now expected to decline by £147 million, or almost 7.4%, from 2025 levels, citing Middle East volatility as a key factor dampening broader global travel demand.
Shares in British Airways owner IAG dipped 0.7% following Heathrow’s updated guidance, reflecting investor concern about softening passenger volumes across international routes.
Britain’s food and drink exporters also faced a tough start to the year, with export volumes falling 8.9% in the first quarter to their lowest level in a decade outside the pandemic, according to the Food and Drink Federation.
UK food and drink exports to the US dropped 28% to £529.6 million following the introduction of tariffs, while exports to the EU fell 6.9% in volume terms due to ongoing post-Brexit trade frictions.
The broader selloff was triggered in part by Apple Inc (NASDAQ:AAPL) raising prices across MacBook and iPad ranges, its first formal move to pass soaring memory and storage costs on to consumers as AI-driven chip demand intensifies.
Swissquote analyst Ipek Ozkardeskaya said: “Apple tanked more than 6% as investors feared that the higher prices would reduce demand and may not offset the squeeze on profit margins.”
Asian markets bore the brunt of the technology selloff overnight, with Seoul’s Kospi down 8%, Tokyo’s Nikkei off more than 3%, and SoftBank falling around 14% following a New York Times report suggesting OpenAI may delay its IPO until 2027.
Deutsche Bank’s Jim Reid described the mood in the region as a “mini ice-age,” with the Magnificent Seven US tech stocks falling more than 2.5% on Thursday as the broader tech mega-cap index moved deeper into correction territory.
On the political front, Resolution Foundation chief executive Ruth Curtice warned presumed incoming Prime Minister Andy Burnham that higher gilt yields and the war in Iran have probably already wiped out the government’s fiscal headroom.
Curtice wrote: “Any extra borrowing comes with big costs. There are no wheezes out of this dark fiscal hole, only tough decisions,” setting a stark tone for the incoming administration’s economic outlook.