FTSE 100 trades lower as gold eases and defence names pull back
The London stock market edged lower on Friday, with the FTSE 100 drifting around the 9,500 level as gold prices retreated from recent highs and defence stocks came under pressure amid softer Middle East tensions. By mid-morning, the Footsie sat about 11 points down, reflecting a cautious mood as investors balanced strong consumer stock momentum against sector-specific headwinds.
Gold’s retreat weighs on miners and miners’ peers
Gold prices have cooled, slipping back from above $4,000 an ounce to around $3,965.58. The pullback has rippled through the mining sector, with large-cap gold miners seeing profit-taking that offset earlier surges. Miners such as Fresnillo and Endeavour Mining were among those leading losses in early trading, while broader mining names also softened in response to softer bullion pricing.
Defence stocks retreat as geopolitical risk premium eases
Defence shares, which had benefited from heightened geopolitical risk during the Gaza conflict, moved lower as ceasefire prospects gained traction. Companies such as BAE Systems and Rolls-Royce Holdings shed around 2.5%, underscoring how the easing of tensions can dampen demand for defence names that had previously benefited from war-time demand and risk hedging strategies.
Analysts noted that a softer risk backdrop also affected related sectors, with oil stocks feeling the pressure as Brent crude declined about 0.6% to roughly $64.81 a barrel. As Scope Markets’ Josh Mahony observed, “Progress towards a ceasefire in Gaza eased geopolitical risk premiums, reducing demand for defence names that had been buoyed by the conflict.”
Investors eye upcoming US earnings, global cues
With the U.S. government shutdown continuing and economic releases scant, attention has shifted to forthcoming corporate results and global macro signals. The next wave of earnings from U.S. banks—Citigroup, Goldman Sachs, JPMorgan Chase, Wells Fargo, Bank of America and Morgan Stanley—will be pivotal in shaping the mood. Market participants will parse how investment banking fees, trading incomes, and consumer borrowing have fared amid ongoing market volatility.
Across Europe, trading activity was mixed. Frankfurt’s DAX inched higher while Paris’s CAC 40 posted a modest gain, suggesting that regional equities are not uniformly burdened by the same macro concerns as UK markets, which continue to navigate domestic budget jitters and softer energy inputs.
Opening session shows a cautious Footsie
At the opening bell, the FTSE 100 slipped about 7 points to 9,502.25 as gold retreated. Miners, especially gold miners, led losses, with Fresnillo and Endeavour Mining dropping sizably. However, some names offered a counterpoint—food services provider Compass Group moved higher, alongside JD Sports Fashion, which posted gains despite a broad risk-off tone.
What this means for investors
For investors, the current snapshot underscores a key theme: even as gold prices pull back, the broader risk environment remains sensitive to geopolitical headlines and policy developments. The easing of Middle East tensions could reduce some pressure on defence and energy equities but may complicate the narrative for investors who had positioned portfolios to benefit from a near-term risk premium. In the UK, budget-related uncertainty and a softer global backdrop could prompt a continued rotation away from cyclicals toward more defensive plays, or toward names with resilient earnings and cost discipline.
Looking ahead
As the global markets await the next batch of earnings from major Western banks and the next round of geopolitical updates, investors will be watching for any sustained shifts in risk appetite. The FTSE 100’s 9,500 level remains a psychological checkpoint, with momentum likely to hinge on bullion prices, defence demand, and the direction of oil and precious metals as the week unfolds.
