(Reuters) – British midcap stocks posted their biggest weekly decline in more than a year on Friday, as borrowing costs rose on the back of higher inflation expectations and concerns about Donald Trump's return to the White House hammered risk sentiment.
made up of companies that closely track the domestic economy, fell 1.4% to an eight-month low.
The index recorded a 2.8% weekly decline, its weakest performance since October 2023, hurt by a sharp rise in Britain's borrowing costs fueling concerns about public finances following big spending plans announced by the government.
Investors have been bracing for this week's big moves in bond markets in markets facing inflationary policies when Trump returns to office in the US.
Pushing yields higher on Friday, stronger-than-expected US payments data encouraged traders to reduce bets on a rate cut by the Federal Reserve this year.
Yields on UK government bonds remained high, with one on the 10-year gilt hovering near its highest level since 2008, while the 30-year is at its highest level since 1998.
The heavyweight exporter fell 0.9% but marked its third weekly advance, supported by sterling's sharp decline throughout the week.
Oil and gas stocks were the bright spot, 0.5%, crude prices rallied more than 4% to reach the highest levels since October as traders focused on supply disruptions that may occur from more sanctions in Russia. (O/R)
Insurers were down 2.3%, with those with greater exposure to the Los Angeles wildfires such as Beazley and Hiscox (LON:) led losses.
Alliance Pharma (LON: ) jumped 38% after it agreed to be acquired by asset management firm DBAY Advisors in an all-cash deal valuing the healthcare group at 349.7 million pounds ($430 million).