London close: Stocks end turbulent week in the red

London stocks ended Friday in negative territory, weighed down by losses in pharmaceutical shares and a surprise slowdown in UK economic growth during the third quarter.

The FTSE 100 index fell 0.09% to 8,063.61 points, while the more domestically-focussed FTSE 250 declined 0.22% to 20,476.64 points.

In currency markets, sterling was last down 0.26% on the dollar to trade at $1.2633, while it lost 0.51% against the euro, changing hands at €1.1969.

"A week of indecision for stock markets is ending on a weaker note following Jerome Powell's unexpected dialling back of dovish rhetoric," said IG chief market analyst Chris Beauchamp.

"Tesla continues to rise as its founder's ascension to the corridors of power becomes ever more impressive, but other tech stocks have taken Powell's speech in a gloomier fashion.

"Nvidia, at risk of weakness due to its earnings next week, has dropped over 2% and looks primed for more profit-taking into next week."

Beauchamp added that a three-day bounce for the FTSE 100 was running out of steam, thanks in large part to index heavyweight GSK, which fell on Friday as investors fretted about a "much tougher period ahead" for pharma stocks now that Trump's pick for health secretary had been announced.

"Gains in continental Europe have stalled too, as the poor session in the US stymies bullish sentiment."

UK economic growth slows further in third quarter

In economic news, the UK economy recorded modest growth of 0.1% in the third quarter, according to official data released earlier, falling short of expectations for a 0.2% expansion.

The Office for National Statistics reported that gains in retail trade, excluding motor vehicles, and a 0.8% rise in construction output underpinned the growth.

However, September's GDP shrank by 0.1%, as manufacturing output contracted by 0.5% and IT services experienced a slowdown.

The services sector, a cornerstone of the UK economy, stagnated during the period.

"The economy grew a little in the latest quarter overall, as the recent slowdown in growth continued," said Liz McKeown, director of economic statistics at the ONS.

"Retail and new construction work both performed well, partially offset by falls in telecommunications and wholesale.

"Generally, growth was subdued across most industries in the latest quarter."

On the continent, the European Commission revised its 2025 eurozone GDP growth forecast slightly downward to 1.3%, compared to its prior estimate of 1.4%.

That followed subdued growth in the second and third quarters of 2024.

Domestic demand was expected to drive economic activity next year, with consumption and investment projected to recover.

However, the Commission warned of heightened uncertainty, citing risks from global protectionist policies.

Across the Atlantic, US retail sales rose 0.4% in October, surpassing forecasts of a 0.3% increase, driven by a 2.3% surge in electronics and appliance sales and a 1.9% rise at auto dealerships.

However, excluding automotive sales, growth was muted at 0.1%.

Declines in furniture, sporting goods, and miscellaneous store categories tempered the overall gains.

In China, retail sales climbed 4.8% year-on-year in October, marking the strongest increase in eight months and exceeding market expectations.

Industrial production rose 5.3%, though it narrowly missed forecasts, while the embattled property sector continued to drag on the economy.

New home prices fell 5.9% year-on-year, the steepest drop since 2015, and real estate investment declined 10.3% in the year to October.

Fixed asset investment remained flat at 3.4%, just shy of expectations.

Pharma firms slide on Trump health secretary pick, Land Sec in the green

On London's equity markets, pharma giants GSK and AstraZeneca were among the day's losers, falling 3.55% and 3.26%, respectively.

The sector came under pressure following news that US president-elect Donald Trump had chosen Robert F Kennedy Jr to lead the Department of Health and Human Services, sparking investor concerns about potential regulatory changes.

"The announcement of vaccine-sceptic Robert F Kennedy Junior as health secretary pick for the incoming Trump administration has spooked investors in the sector, with US drug companies also seeing their shares come under significant pressure overnight," said Russ Mould, investment director at AJ Bell.

"The impact on the sector is hard to judge fully at this stage but, at the very least, it will cause a good deal of uncertainty."

In the hospitality sector, InterContinental Hotels Group slipped 0.44%, reversing earlier gains despite an upgrade to 'overweight' by Barclays.

Premier Inn owner Whitbread fared worse, declining 1.22% after the same bank downgraded the stock to 'equalweight.'

Meanwhile, Premier Foods dropped 4.34%, with investors shrugging off the Mr Kipling owner's report of higher interim sales.

On the upside, Land Securities Group climbed 4.57% after returning to profitability in the first half, posting a pre-tax profit of £243m compared with a £193m loss a year earlier.

The company also raised its full-year earnings guidance, buoyed by a recovering property market and rising demand.

Burberry Group added 3.27%, continuing its rally following Thursday's announcement of a £40m cost-saving turnaround plan aimed at addressing its sales challenges.

Outside the FTSE 350, TT Electronics soared 40.51% after revealing it had rejected two takeover bids from Volex, sending its shares sharply higher.

Reporting by Josh White for Sharecast.com.