Ftse 100 falls as Rightmove and IAG shares tumble 12 per cent

Across the week, the Ftse 100 recorded a 0.4 per cent decline, while the Ftse 250 dropped 1.8 per cent.

The weakness extended to European markets, with Frankfurt’s DAX falling 0.7 per cent and Paris’s CAC 40 down 0.2 per cent.

Wall Street also struggled, as the Dow Jones Industrial Average slipped 0.6 per cent and the technology-heavy Nasdaq Composite fell 1.9 per cent by London’s close.

Rightmove’s sharp fall followed its announcement of plans to boost investment in artificial intelligence between 2026 and 2028.

The Milton Keynes-based company said it would accelerate spending on AI-driven operations, consumer innovation and research to support long-term growth.

The strategic shift came alongside new guidance forecasting revenue growth of 8 to 10 per cent for 2026, but a slowdown in underlying operating profit expansion to between 3 and 5 per cent.

Russ Mould, investment director at AJ Bell, said: "Investing for future growth is not a bad thing but the scale of the market's negative reaction implies real scepticism about its decision to put so much money into AI."

Citi analysts said the new guidance suggested "low to mid-single digit downgrades to consensus underlying operating profit."

British Airways parent company IAG also fell 12 per cent after flagging weaker trading conditions across major routes.

The airline said it was experiencing "softness" in US travel demand, particularly from economy leisure passengers.

It also cited weaker pricing across Europe due to heightened competition and capacity growth.

"As expected the North Atlantic market saw some softness in US point-of-sale economy leisure and unit prices across our airlines were lower in the European market due to a combination of high growth by British Airways and more competitive markets elsewhere," the company said.

Technology shares led broader losses, with semiconductor stocks particularly weak, according to Joshua Mahony at Scope Markets.

Despite the turbulence, analysts said the recent volatility did not necessarily signal a change in market direction.

Mark Haefele, chief investment officer at UBS Global Wealth Management, said: "While political uncertainty and shifting investor sentiment could inject further volatility into the market, we continue to believe that the fundamentals supporting the rally remain intact."

Goldman Sachs expressed confidence in UK equities by lifting its Ftse 100 forecast on Friday, predicting the index will surpass 10,000 within six months and reach 10,200 within a year.

The bank cited stronger corporate earnings projections for 2025 and 2026 as the reason for its upgrade from a previous 9,600 target.

Sterling strengthened to 1.3166 against the dollar, up from 1.3106 on Thursday, while the euro gained to 1.1582.

Among other notable movers, ITV rose 17 per cent after confirming early-stage talks with Sky over a potential £1.6billion sale of its media and entertainment division.

Oxford Nanopore climbed 4.7 per cent after issuing upbeat guidance, saying it expects revenue growth at the upper end of its 20 to 23 per cent range.

Looking ahead, investors will turn to key UK data next week, including employment, wage and GDP figures.

Corporate updates are due from Aviva and Rolls-Royce, while sports nutrition group Applied Nutrition reports full-year results on Monday.