The FTSE 100 slipped on Friday as UK services activity contracted at its sharpest pace in nearly three-and-a-half years and US markets sat closed for Independence Day. Fresnillo bucked the trend on a higher gold price, while the reading pointed to a loss of momentum for the UK economy in the second quarter.
London's blue-chip index gave back some of the previous day's gains on a quiet Friday, with US financial markets shut for the holiday and few catalysts in play. The FTSE 100 was down 35.59 points, or 0.3%, at 10,617.28, while the FTSE 250 rose 74.53 points, also 0.3%, to 23,492.11.
The pullback followed a strong session on Thursday. Because the index had hit its highest level since April the day before, the retreat looked like nothing more than a bout of profit-taking.
UK services activity sinks
The main drag came from fresh survey data. UK services activity contracted at the sharpest pace in nearly three-and-a-half years in June, as weak demand, geopolitical uncertainty and rising cost pressures weighed on business conditions, according to S&P Global. The final services PMI business activity index fell to 48.8 points in June from 49.3 in May, holding below the 50-point line that separates growth from contraction.
The composite output index, which combines services and manufacturing, declined to 49.3 from 49.7, its weakest reading since April 2025. Pantheon Macroeconomics analyst Rob Wood estimated the June reading was consistent with quarter-to-quarter GDP falling by 0.1% in Q2, a downside risk to his firm's growth forecasts.
Gold miners and financials climb
Not every corner of the market fell. Fresnillo rose 1.7% as the price of gold climbed, with gold trading at USD4,176.14 an ounce, up from USD4,124.43 late Thursday. Financials also held up, with St James's Place the best FTSE 100 performer after UBS raised its price target on the stock.
Thursday's rally had been sparked by softer US jobs data, which eased fears of an interest rate hike. AJ Bell said the release of Fed meeting minutes on Wednesday 8 July would give the market more to weigh next week.
Sources: MarketScreener, UK Investor Magazine
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