𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Stocks in London slumped on Thursday, tracking US and European counterparts, as investors weighed rate calls in Europe and the UK and as merger talks between Glencore and Rio Tinto collapsed once more.

The FTSE 100 index closed down 93.12 points, 0.9%, at 10,309.22.

The FTSE 250 ended down 229.80 points, 1.0%, at 23,103.35, and the AIM All-Share fell 11.45 points, 1.4%, at 802.90.

The Bank of England (BoE) left the bank rate unchanged at 3.75% on Thursday, by a slim 5-4 majority.

Governor Andrew Bailey once more proved crucial as he supported leaving rates on hold, after backing a cut in December.

Despite the hold, Mr Bailey in a post-decision press conference said “disinflation is on track and is running ahead of the schedule expected in November”.

However, he added that service price inflation and wage growth need to “fall further” for the Monetary Policy Committee to be confident of a return to the inflation target.

In a statement, the BoE’s Monetary Policy Committee said: “On the basis of the current evidence, bank rate is likely to be reduced further,” although “judgments around further policy easing will become a closer call”.

Kallum Pickering, chief economist at Peel Hunt, thinks it is now a question of “when, not if” as to when the BoE next lowers rates after the “dovish surprise”.

“Having started the day expecting the next cut in April, money markets now see a 60% chance of a cut in March already,” he noted.

Mr Pickering thinks the votes of Mr Bailey and Catherine Mann will be pivotal going forward for the March meeting.

He said: “If either of these members signal that they are ready to cut in March, that should be enough to swing the vote.”

JPMorgan analyst Allan Monks said the “dovish tilt” is supportive of “our non-consensus view of a March cut”.

He said: “If the data comes in close to the BoE’s forecasts or weaker, we think a majority would see this as a validation of the BoE’s central projection that inflation is on track to return sustainably to the target.”

In Europe, the European Central Bank (ECB) also left rates on hold.

The widely forecast decision by the Frankfurt-based central bank keeps the deposit facility rate at 2.00%, the main refinancing operations rate at 2.15% and the marginal lending facility at 2.40%.

Analysts at Citi detected a “hawkish undertone to the ECB assessment, reflected in its staff projections” which it believes merely confirms that the “bar to a rate cut is extremely high”.

In European equities on Thursday, the CAC 40 in Paris closed down 0.3%, while the DAX 40 in Frankfurt fell 0.5%.

Stocks in New York were down sharply. The Dow Jones Industrial Average was down 1.1%, as was the S&P 500, while the Nasdaq Composite declined 1.4%.

The yield on the US 10-year Treasury was quoted at 4.21%, narrowed from 4.28%. The yield on the US 30-year Treasury was quoted 4.86%, down from 4.92% on Wednesday.

Wall Street was hit by further falls in technology stocks and by a weak labour market report.

According to the Bureau of Labour Statistics job openings and labour turnover survey the number of job openings declined to 6.542 million in December from a revised 6.928 million in November.

FXStreet consensus forecast a rise in December to around 7.2 million.

November’s total was revised down by 218,000, the number of hires was revised up by 6,000 and the number of total separations was revised up by 64,000.

Wells Fargo said the report underscored the labour market remains in a “precarious” position, with the ongoing slide suggesting a “turnaround in hiring conditions is not yet upon us”.

Meanwhile, the weakness in software and technology stocks showed no signs of abating.

Google owner Alphabet fell 4.2% despite strong results after forecasting that capex could double in 2026, while Qualcomm slumped 7.3% after disappointing earnings.

Goldman Sachs said the collapse in software share prices implicitly reflects downside risk to record high profit margins and growth estimates.

The broker pointed out that historical episodes of major disruption risk suggest that share price stabilisation will require stability in the earnings outlook.

But it added investor positioning data, while indicating “further room to fall” suggests that “most of the volatility is likely behind us.”

In London, data providers and software stocks were actually among the best performers after the recent heavy falls.

London Stock Exchange gained 5.5% after strong results from majority-owned Tradeweb.

RBC Capital Markets said results from Tradeweb showed revenue 1% ahead of consensus and earnings per share 4% ahead.

“These results should offer the market a further reminder of LSEG’s diversified range of high-quality, growing revenue streams. These stand in the face of perceived ‘AI-loser’ narratives which have weighed on shares so far in 2026,” RBC said.

Sage, up 2.7%, and Relx, up 2.3%, also rallied after recent weakness.

The dovish BoE hold put sterling under pressure.

The pound was quoted lower at 1.3536 dollars at the time of the London equities close on Thursday, compared with 1.3656 dollars on Wednesday.

The euro stood slightly lower at 1.1791 dollars, against 1.1798 dollars. Against the yen, the dollar was trading higher at 156.96 yen compared with 156.69 yen.

Late drama in London saw merger talks between Rio Tinto and Glencore collapse.

In a statement, Rio said it is no longer considering a possible merger or other business combination with Glencore after determining that it could not reach an agreement that would deliver value to its shareholders.

For its part, Glencore said the key terms of the potential offer were Rio Tinto retaining both the chair and chief executive roles and delivering a proforma ownership of the combined company which, in its view, “significantly undervalued Glencore’s underlying relative value contribution to the combined group, even before consideration of a suitable acquisition control premium”.

Glencore said its “standalone investment case is strong”.

Talks held between the two firms in late 2024 previously collapsed.

Glencore sank 7.5% and Rio Tinto eased 1.0%.

Elsewhere on the FTSE 100, Vodafone fell 4.6% after third quarter results missed forecast due to weaker than expected organic revenue growth in its German business. Analysts also pointed out the telco’s share price has been a strong performer in 2026 so far.

Entain gave back 6.2% after performing well on Wednesday on the back of strong trading at 50% owned joint venture BetMGM, while the lower gold price and a downgrade from Berenberg dragged Fresnillo 6.3% lower.

Gold was quoted lower at 4,848.34 dollars an ounce on Thursday, down against 4,916.04 dollars at the same time on Wednesday.

Silver’s roller-coaster run continued, dropping 14% on Thursday to 75.60 dollars an ounce, after trading as high as 116 dollars an ounce as recently as last week.

Brent oil was quoted at 67.37 dollars a barrel on Thursday, little changed from 67.41 dollars late on Wednesday.

The biggest risers on the FTSE 100 were London Stock Exchange Group, up 416.00p at 7,586.00p, GSK, up 100.00p at 2,180.00p, Sage, up 25.80p at 871.20p, Experian, up 75.00p at 2,621.00p and Relx, up 64.00p at 2,249.00p.

The biggest fallers on the FTSE 100 were Glencore, down 35.95p at 475.25p, NatWest, down 41.60p at 650.00p, Fresnillo, down 220.00p at 3,556.00p, Lloyds Banking Group, down 6.25p at 105.80p and Hikma Pharmaceuticals, down 80.00p at 1,552.00p.

Friday’s global economic calendar has Canadian jobs data, French trade figures and a Halifax house price index report in the UK.

Friday’s UK corporate calendar has a trading statement from Victrex.

Contributed by Alliance News