FTSE 250 closes down four per cent in worst week since 2023

Friday 10 January 2025 4:30 pm
 |  Up to date: 

Friday 10 January 2025 3:57 pm

The FTSE 250 fell nearly 4 per cent this week, experiencing its worst week since August 2023 as fears mount over the soundness of the UK economic system.

With pound sterling sinking and UK gilt yields rising to decade-long highs, traders have begun to panic that the UK economic system and authorities are coming underneath strain.

“The worldwide bond sell-off confirmed few indicators of letting up during the last 24 hours, with long-term borrowing prices persevering with to maneuver larger throughout the board,” stated Deutsche Financial institution analysis strategist Jim Reid.

In addition to wider expectations of the UK economic system sinking, disappointing outcomes from retailers like B&M and Greggs additionally pushed the index down all through the week.

The sausage-roll maker is down nearly 25 per cent for the reason that begin of the week, after reporting a slowdown in gross sales due to “subdued excessive avenue footfall”.

In the meantime, Hays fell greater than 10 per cent after Morgan Stanley downgraded the inventory to underweight, whereas merchandising machine operator ME Group fell 11 per cent.

The 4 per cent fall is the worst weekly efficiency for the FTSE 250 for the reason that week of 13 August 2023, when fears over the Chinese language economic system and poor retail gross sales wracked the index.

In the meantime, regardless of the stunning efficiency of the FTSE 250, the FTSE 100 is definitely up 0.5 per cent during the last week.

“Roughly half of the [FTSE 250] generates earnings within the UK whereas about three quarters of the FTSE 100 earns abroad, making that index much less of a play on the state of the UK,” defined Russ Mould, funding director at AJ Bell.

With the pound plummeting in opposition to main currencies, FTSE 100 companies that do enterprise internationally may very well profit from the financial turmoil at dwelling.

As well as, the excessive focus of miners within the FTSE 100 have been boosted from a world rebound in commodity costs all through the week.