FTSE's Rollercoaster: Gains Amidst Economic Challenges

The FTSE 100 experienced its sharpest drop in over two weeks due to declines in companies like Diageo, which fell due to new health warnings. Despite this, the index achieved a weekly gain. Challenges such as decreased footfall in retail and weak consumer lending add to economic concerns.

The FTSE 100 index in London recorded its most significant decline in over two weeks on Friday, influenced largely by a 3.9% drop in spirits manufacturer Diageo. This was after the U.S. Surgeon General suggested cancer warnings for alcoholic drinks, resulting in a 3.4% fall for the entire beverage sector.

Despite Friday's decline, the FTSE 100 managed a 1.4% weekly gain, marking its best performance in six weeks. Meanwhile, the FTSE 250 index saw a slight dip of 0.2% on the day but achieved a 0.7% gain over the week. Energy shares resisted the general downtrend, climbing 1.5% as oil prices remained stable.

Retail struggles became apparent as 2025's footfall decreased by 2.2%, the most significant drop since 2021 according to the British Retail Consortium. Moreover, consumer lending data provided by the Bank of England highlighted a slowdown, while mortgage approvals fell short of expectations. These economic challenges come alongside the impact of potential tariff policies anticipated from Donald Trump's possible return to the U.S. presidency.

(With inputs from agencies.)