London midday: FTSE extends losses, gilt yields rise as Burnham eyes Wesminter return

(Sharecast News) - London stocks had extended losses by midday on Friday, led lower by miners and utilities, while sterling fell and borrowing costs jumped as investors reacted to the prospect of Andy Burnham's potential return to Westminster. The FTSE 100 was 1.4% lower at 10,226.57, while sterling was down 0.2% against the dollar at 1.3383, having hit a one-month low of 1.3350 after the Mayor of Greater Manchester - who is considered more likely to favour a looser fiscal stance - announced plans to stand as the Labour party's candidate in a by-election in Makerfield.

The yield on the 10-year gilt rose 14 basis points to 5.136% and the yield on the 30-year gilt was up 15bps at 5.806%.

The news came after ex-minister Josh Simons said he would step down to allow Burnham a way back into the Commons.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 fell as emerging evidence of inflationary pressures and domestic political uncertainty combined to put investors on edge.

"The decision of a Labour MP to stand down and pave the way for Andy Burnham to return to parliament - likely as a precursor to a leadership challenge - has seen gilt yields move yet higher.

"While there's no guarantee Burnham would win a by-election or contest to be prime minister, the fact he is on record as saying Britain must stop being 'in hock to bond markets' has helped push UK borrowing costs higher and seen the pound slump.

"A process involving Burnham also promises to be more protracted and 'noisy', thereby prolonging and exacerbating the uncertainty about the political situation in the UK."

More broadly, investors mulled the outcome of the meeting between US President Donald Trump and China's Xi Jinping.

Susannah Streeter, chief investment strategist at Wealth Club, said: "There had been hopes that the US-China summit would be a catalyst for a breakthrough in the Iran standoff or in trade relations. However, the meeting between Xi Jinping and Donald Trump was big on warm words and symbolism but not outcomes.

"Instead of reassurance, the Chinese premier's focus on Taiwan, warning missteps between the two superpowers could create clashes and conflicts, has caused nervousness about fresh geopolitical fractures looming. With diplomatic efforts aimed at resolving the Middle East conflict in limbo, fresh uncertainty has flooded in. Oil prices have risen further, with Brent crude trading above $107 a barrel, keeping inflationary concerns alight."

In equity markets, miners were under the cosh as gold, silver and copper prices fell, with Fresnillo, Hochschild, Endeavour, Anglo American, Antofagasta and Glencore among the biggest losers.

Utilities - which tend to fall when government bond yields rise - were also sharply lower, with National Grid, United Utilities, SSE and Centrica all down.

British Gas owner Centrica was also in focus after agreeing to pay £20m into Ofgem's voluntary redress fund and further compensate customers whose homes were broken into by debt collectors working for British Gas to illegally fit prepayment meters, in some cases where residents were vulnerable or had disabilities.

Construction products distributor Grafton lost ground as it said it delivered a "resilient" start to 2026, but warned that rising cost pressures due to the Iran war could dent market demand and volumes.

Student accommodation provider Unite was also weaker after an AGM statement.

On the upside, 3i Group clawed back some ground, having tanked on Thursday after the private equity and infrastructure investment firm pointed to slowing sales at its biggest holding, Dutch discount retailer Action.

Aberdeen was boosted by an upgrade to 'buy' from 'neutral/high risk' at Citi, which said there was "still lots to play for".

Market Movers

FTSE 100 (UKX) 10,226.57 -1.41% FTSE 250 (MCX) 22,490.66 -1.48% techMARK (TASX) 5,851.45 -1.17%

FTSE 100 - Risers

3i Group (III) 2,224.00p 5.82% Diageo (DGE) 1,531.00p 2.07% BP (BP.) 547.50p 1.48% The Sage Group (SGE) 861.40p 0.84% Standard Life (SDLF) 773.00p 0.78% Relx plc (REL) 2,381.00p 0.72% Shell (SHEL) 3,166.00p 0.60% Reckitt Benckiser Group (RKT) 4,576.00p 0.56% Unilever (ULVR) 4,248.50p 0.50% Flutter Entertainment (DI) (FLTR) 6,992.00p 0.46%

FTSE 100 - Fallers

Airtel Africa (AAF) 337.20p -8.53% Fresnillo (FRES) 3,414.00p -8.23% Antofagasta (ANTO) 3,949.00p -6.53% Anglo American (AAL) 3,820.00p -6.08% Burberry Group (BRBY) 1,025.50p -5.26% National Grid (NG.) 1,225.00p -5.04% United Utilities Group (UU.) 1,314.00p -4.92% SSE (SSE) 2,345.00p -4.64% Severn Trent (SVT) 2,990.00p -4.47% Centrica (CNA) 193.45p -4.30%

FTSE 250 - Risers

Abrdn (ABDN) 237.40p 4.78% Diversified Energy Company (DI) (DEC) 1,200.00p 2.21% Harbour Energy (HBR) 294.20p 1.52% Premier Foods (PFD) 206.60p 1.28% Ithaca Energy (ITH) 282.40p 1.22% Genuit Group (GEN) 252.80p 1.20% Avon Technologies (AVON) 1,562.00p 1.17% Spire Healthcare Group (SPI) 227.00p 1.11% Kainos Group (KNOS) 792.00p 0.76% Genus (GNS) 2,386.00p 0.76%

FTSE 250 - Fallers

Hochschild Mining (HOC) 604.50p -8.43% Renishaw (RSW) 4,984.00p -5.25% Pan African Resources (PAF) 141.90p -5.03% Pennon Group (PNN) 507.00p -4.78% Oxford Instruments (OXIG) 2,958.00p -4.71% XP Power Ltd. (DI) (XPP) 1,840.00p -4.56% Dr. Martens (DOCS) 61.80p -4.19% Endeavour Mining (EDV) 4,697.00p -4.00% Shawbrook Group (SHAW) 299.25p -3.93% BlackRock World Mining Trust (BRWM) 988.00p -3.89%