The FTSE 100 closed down 29.22 points, or 0.3%, at 10,868.05 on Friday, following a week of strong performance that included a record intra-day high of 10,989.45. Investors took profits amid rising bond yields, which pressured the index. The FTSE 250 and AIM All-Share also declined, closing at 23,975.02 and 762.55, respectively. For the week, the FTSE 100 rose 1.2%, while the FTSE 250 increased by 0.7%.
NatWest's Strong Performance
NatWest Group was a standout performer, rising 3.2% after it raised its guidance for 2026 and announced a potential share buyback six months ahead of schedule. The bank's profit and income exceeded expectations in the second quarter, marking its fifth consecutive earnings beat since the government sold its remaining stake last May. AJ Bell investment director Russ Mould noted that NatWest's consistent performance has been aided by a favorable interest rate environment and strategic initiatives.
IG Group's Decline
Conversely, IG Group fell 14%, making it the worst performer on the FTSE 100. The decline followed its announcement of a $1.3 billion acquisition of US fantasy sports operator Underdog, which investors viewed unfavorably. The company's total revenue for the first half of 2026 increased by 18% year-on-year, but the market reaction was negative. Other notable declines included Melrose Industries, which fell 6.3% due to concerns over a chemical leak incident at its Garden Grove facility in California.
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The decline in the FTSE 100, driven by profit-taking and rising bond yields, may affect investor sentiment in UK equities, particularly in the banking and trading sectors. Higher yields could lead to increased borrowing costs, impacting corporate profitability. Watch for the upcoming UK Budget on October 28, which may influence market expectations and economic forecasts.