London stocks ended down but off lows on Tuesday amid tariff worries, as Donald Trump ramped up his rhetoric on Greenland and as a selloff in Japanese bonds hit sentiment.
The FTSE 100 closed 0.7% lower at 10,126.78.
Axel Rudolph, chief technical analyst at IG, said: "Markets have slipped back into a risk-off mood after renewed political shocks from President Trump and rapidly rising Japanese bond yields unsettled investors, erasing early-January stock gains, pushing bitcoin sharply lower and leaving gold as the main haven.
"Following the collapse at a 20-year Japanese government bond auction, the country's 10-year yields rallied to their highest level since the 1990s while 30- and 40-year yields hit record highs, driving global bond yields higher and worrying investors about a possibly severe stock market setback."
On home shores, figures from the Office for National Statistics showed the unemployment rate was unchanged in November, while wage growth slowed modestly.
The unemployment rate in September through November was 5.1%, unchanged on the previous month. It was, however, notionally ahead of consensus expectations for 5%.
Average growth in employees' regular average earnings, which excludes bonuses, slowed to 4.5% from 4.6%, in line with expectations. Earnings including bonuses also slowed, nudging down to 4.7% from 4.8%.
Axel Rudolph said "steady unemployment and slowing wage growth have reinforced the case for Bank of England easing, even as the broader economic outlook remains subdued".
"Investors now focus on Wednesday's inflation data and whether it'll support further easing," he added.
In equity markets, paper and packaging group Mondi was the worst performer on the FTSE 100, while Beazley lost ground, having rocketed on Monday after Zurich Financial disclosed a £7.7bn takeover bid for the insurer.
JD Sports and Burberry both fell ahead of trading updates on Wednesday.
Drugs giant GSK was in the red after it agreed to buy American allergy specialist Rapt Therapeutics in a $2.2bn deal.
Ibstock slumped as it staid 2025 started well, with a solid increase in volumes, but market uncertainty led to progressively tougher conditions through the second half.
On the upside, Informa was the standout gainer on the top-flight index as it said strong trading through the fourth quarter, particularly in Live B2B Events, was expected to deliver full-year results in line with or ahead of market guidance. It also announced a £200m share buyback and a major new B2B events partnership in Dubai.
Gold miners Endeavour and Hochschild also shone as gold prices surged to new highs.
Market Movers
FTSE 100 (UKX) 10,126.78 -0.67%
FTSE 250 (MCX) 22,967.50 -0.62%
techMARK (TASX) 5,833.38 -0.71%
FTSE 100 - Risers
Informa (INF) 907.40p 4.01%
Haleon (HLN) 372.90p 3.27%
Rentokil Initial (RTO) 461.70p 1.76%
Melrose Industries (MRO) 625.20p 1.36%
Coca-Cola Europacific Partners (DI) (CCEP) 6,610.00p 1.23%
Rolls-Royce Holdings (RR.) 1,281.00p 1.10%
NATWEST GROUP (NWG) 651.80p 0.90%
Pearson (PSON) 938.00p 0.88%
Scottish Mortgage Inv Trust (SMT) 1,195.00p 0.76%
Diploma (DPLM) 5,500.00p 0.73%
FTSE 100 - Fallers
Mondi (MNDI) 845.40p -4.65%
Beazley (BEZ) 1,126.00p -3.76%
Pershing Square Holdings Ltd NPV (PSH) 4,442.00p -2.93%
Land Securities Group (LAND) 635.00p -2.91%
Bunzl (BNZL) 1,989.00p -2.79%
AstraZeneca (AZN) 13,520.00p -2.66%
St James's Place (STJ) 1,445.00p -2.66%
British American Tobacco (BATS) 4,257.00p -2.65%
Prudential (PRU) 1,167.50p -2.30%
Ashtead Group (AHT) 5,000.00p -2.15%
FTSE 250 - Risers
Pan African Resources (PAF) 131.80p 5.10%
Hochschild Mining (HOC) 603.00p 3.97%
Baltic Classifieds Group (BCG) 199.80p 3.10%
Ocado Group (OCDO) 269.20p 2.75%
Endeavour Mining (EDV) 4,208.00p 2.73%
Harbour Energy (HBR) 215.60p 2.37%
Lancashire Holdings Limited (LRE) 636.00p 1.92%
Ceres Power Holdings (CWR) 308.80p 1.65%
QinetiQ Group (QQ.) 529.00p 1.44%
Playtech (PTEC) 270.50p 1.12%
FTSE 250 - Fallers
W.A.G Payment Solutions (EWG) 118.00p -4.84%
Marshalls (MSLH) 159.40p -4.67%
AEP Plantations (AEP) 1,400.00p -4.11%
Ashmore Group (ASHM) 223.20p -4.04%
Ibstock (IBST) 130.80p -3.96%
Safestore Holdings (SAFE) 796.50p -3.75%
Mitchells & Butlers (MAB) 262.00p -3.68%
C&C Group (CDI) (CCR) 127.00p -3.64%
Johnson Service Group (JSG) 139.00p -3.47%
Pagegroup (PAGE) 193.10p -3.11%