(Reuters) – British mid-cap shares on Friday posted their biggest weekly drop in more than a year, as rising borrowing costs due to higher inflation expectations and concerns about Donald Trump’s return to the White House hit the market. feeling of risk.
The , which is made up of companies that closely follow the national economy, fell 1.4% to an eight-month low.
The index posted a weekly drop of 2.8%, its weakest performance since October 2023, hit by a sharp rise in British borrowing costs that fueled concerns about public finances following big spending plans announced by the government.
Investors attributed this week’s big moves in bond markets to markets preparing for inflationary policies once Trump returns to office in the US.
Further boosting yields on Friday, better-than-expected US payrolls data led traders to reduce bets on a rate cut by the Federal Reserve this year.
UK government bond yields remained elevated, with the 10-year bond hovering around its highest level since 2008, while the 30-year bond stood at its highest level since 1998.
The export-heavy sector fell 0.9% but made its third consecutive weekly gain, supported by a sharp fall in sterling throughout the week.
Oil and gas stocks were a bright spot, up 0.5%, crude oil prices rose more than 4% to hit their highest levels since October as traders focused on potential supply disruptions due to more sanctions on Russia. [O/R]
Insurers fell 2.3%, and those that had large exposure to the Los Angeles wildfires, such as Beazley and Hiscox (LON:) main losses.
Pharmaceutical Alliance (LON:) rose 38% after it agreed to be acquired by asset management firm DBAY Advisors in an all-cash deal that valued the healthcare group at £349.7 million ($430 million).