(Sharecast News) - London stocks had extended losses by midday on Thursday following a record close in the previous session, with Centrica and Rio Tinto leading the decline after disappointing results.
The FTSE 100 was down 0.7% at 10,608.25, having hit a record closing high on Wednesday.
Investors were digesting the latest Industrial Trends survey from the Confederation of British Industry, which showed the downturn in the manufacturing sector eased in the three months to February, but the pipeline for activity remains poor.
Output volumes fell in the period but at a slower pace than January, with a net balance of -14% this month versus -25%. A balance is the weighted percentage of firms reporting an increase and those reporting a decrease.
The CBI said output declined in 13 out of 17 sub-sectors, with the fall driven by the metal products, food, drink & tobacco, and mechanical engineering sub-sectors.
Total orders books were reported as were reported as "below normal", with a balance of -28% in February, from -30% in January.
Export order books were also reported as "below normal", albeit to a slightly lesser extent than in January, with a balance of -26%, up from -30%.
The survey found that expectations for average selling price inflation were elevated in February, with a balance of 26%, from 29% in January.
CBI senior economist Cameron Martin said: "The downturn in manufacturing output eased in February, after a downbeat period around the turn of the year. However, many firms continue to report customers holding back amid low confidence and elevated cost pressures.
"The Spring Forecast is an opportunity for the government to build momentum behind its growth mission and restore confidence. Manufacturers want to see the government focused on accelerating Industrial Strategy delivery, addressing skills shortages, and lowering the cost of doing business by bringing forward energy costs support. Tackling punitive energy costs will strengthen competitiveness, ease cost of living pressures, and help boost demand across the economy."
In equity markets, Centrica tumbled after the British Gas owner said it was pausing its share buyback programme as it reported a decline in full-year operating profit in a "challenging environment", with varied performance across the business.
In the year to the end of December 2025, operating profit fell to 814m from 1.5bn the year before, while adjusted earnings before interest, tax, depreciation and amortisation dropped to 1.4bn from 2.3bn.
Mining giant Rio Tinto was also under the cosh as it posted a 14% drop in full-year net profit as weak steel demand in China hit iron ore earnings, despite better prices for copper and gold. The company, which recently abandoned merger talks with rival Glencore, said net profit came in at $9.97bn in 2025 compared with $11.55bn a year earlier.
Dan Coatsworth, head of markets at AJ Bell, said: "Investors got a nasty shock from Centrica's results, causing the shares to slump and drag the UK market down in the process.
"While Centrica is in the bottom half of the FTSE 100 by weighting, a large downward movement from its shares still had meaningful influence on the UK stock index.
"The UK market was also dragged down by the market reaction to Rio Tinto's results, albeit that looked more like profit taking after a strong rally than anything worrying in its figures. Weaker iron ore was offset by strong copper takings."
EasyJet, Barclays, GSK, Imperial Brands and AstraZeneca all lost ground as they traded without entitlement to the dividend.
On the upside, paper and packaging group Mondi gained even as it slashed its dividend after a 29% slump in annual profits in 2025, as it pointed to further declines in paper prices over the first quarter as a prolonged cyclical downturn continues across the sector.
Market Movers
FTSE 100 (UKX) 10,608.25 -0.73%
FTSE 250 (MCX) 23,579.53 -0.45%
techMARK (TASX) 6,122.71 -0.82%
FTSE 100 - Risers
Relx plc (REL) 2,329.00p 4.25%
Mondi (MNDI) 943.80p 2.10%
Beazley (BEZ) 1,230.00p 1.57%
LondonMetric Property (LMP) 213.40p 0.76%
Experian (EXPN) 2,569.00p 0.71%
BAE Systems (BA.) 2,124.00p 0.66%
Autotrader Group (AUTO) 474.40p 0.62%
Compass Group (CPG) 2,193.00p 0.60%
DCC (CDI) (DCC) 5,230.00p 0.58%
Coca-Cola Europacific Partners (DI) (CCEP) 7,790.00p 0.52%
FTSE 100 - Fallers
Centrica (CNA) 185.35p -5.43%
Rio Tinto (RIO) 7,121.00p -3.63%
easyJet (EZJ) 474.60p -3.60%
Antofagasta (ANTO) 3,864.00p -3.40%
Melrose Industries (MRO) 662.60p -2.82%
SSE (SSE) 2,534.00p -2.69%
Barclays (BARC) 473.90p -2.50%
InterContinental Hotels Group (IHG) 141.50p -2.45%
Metlen Energy & Metals (MTLN) 35.35p -2.21%
Burberry Group (BRBY) 1,156.00p -2.12%
FTSE 250 - Risers
Diversified Energy Company (DI) (DEC) 1,010.00p 2.64%
Trainline (TRN) 201.00p 2.13%
Pinewood Technologies Group (PINE) 313.00p 1.95%
Trustpilot Group (TRST) 136.80p 1.86%
Domino's Pizza Group (DOM) 204.20p 1.69%
Playtech (PTEC) 344.50p 1.62%
Ashmore Group (ASHM) 247.80p 1.56%
Ocado Group (OCDO) 230.80p 1.23%
Harbour Energy (HBR) 225.80p 1.16%
ITV (ITV) 81.30p 0.87%
FTSE 250 - Fallers
Pan African Resources (PAF) 153.20p -4.37%
HGCapital Trust (HGT) 435.50p -3.97%
Wizz Air Holdings (WIZZ) 1,344.00p -3.17%
Plus500 Ltd (DI) (PLUS) 4,342.00p -2.65%
Pennon Group (PNN) 571.50p -2.39%
Senior (SNR) 254.00p -2.31%
BlackRock World Mining Trust (BRWM) 959.00p -2.14%
OSB Group (OSB) 599.50p -2.12%
RHI Magnesita N.V. (DI) (RHIM) 3,155.00p -1.87%
Oxford Biomedica (OXB) 792.00p -1.86%
71.52 (0.67%)
0.00