London, Feb 25, 2026, 17:56 GMT — Market closed
- FTSE 100 ends at a fresh record as banks and miners drive gains
- HSBC rallies after lifting a key profitability target
- Diageo slumps after a forecast cut and dividend reduction
Britain’s FTSE 100 closed at a fresh record on Wednesday, led by HSBC and a jump in mining shares, while Diageo sank 12.7% after its new chief cut guidance and the interim dividend. The blue-chip index ended up 1.18% at 10,806.41, with the mid-cap FTSE 250 up 0.5%; precious metal miners rose 3.8% and industrial metal miners gained 3.3%. HSBC surged 7.9% after lifting a key profitability target; “The bank has slimmed down to focus on fewer regions,” said Russ Mould, investment director at AJ Bell. (Reuters)
The tone shifted as investors latched onto new signs that companies may be learning to live with AI, not just fear it. “It’s still early in the process,” said Robert Pavlik, a senior portfolio manager at Dakota Wealth, arguing that firms will still need people in the loop even as they try to use AI to cut costs. (Reuters)
In London, the bid landed where the index has most weight: banks and miners. That left the market leaning on the next turn in rates and commodities, with traders already circling next week’s fiscal update for any surprise.
HSBC said it had raised its return on tangible equity target to “17% or better” through 2028. Return on tangible equity is a gauge of profit against shareholders’ equity excluding goodwill and other intangibles. Chief executive Georges Elhedery said the bank was becoming “a simple, more agile, focused bank built for a fast-changing world” after a year that included $4.9 billion of one-off charges and a 7% dip in pretax profit to $29.9 billion. (Reuters)
Mining shares tracked firmer precious metals, with investors again paying up for perceived hedges. Spot gold rose 1.1% to $5,205.14 an ounce, and Bart Melek, TD Securities’ global head of commodity strategy, pointed to the “inflationary impact from tariffs” as part of the bid for safety. (Reuters)
Diageo’s new chief Dave Lewis started his tenure with a reset, cutting the group’s 2026 organic sales outlook and halving the interim dividend to 20 cents a share. He said pressure on consumer wallets was “by far and away” the biggest issue, while the company flagged constraints on Guinness supply. The warning hit spirits peers too, and AJ Bell’s Dan Coatsworth called the half-year numbers “awful.” (Reuters)
Hiscox announced a $300 million share buyback, a move that returns cash by repurchasing stock, after reporting a 5.9% rise in insurance contract written premium to $4.98 billion. Written premium is the value of policies sold and renewed before claims. (Reuters)
Aston Martin said it would cut up to 20% of its workforce and aim for about £40 million in annualised savings as it wrestles with U.S. import tariffs and weak demand in China. The luxury carmaker also trimmed its five-year capital spending plan to £1.7 billion by delaying investment in electric-vehicle technology. It said tariffs had been “extremely disruptive” and demand “extremely subdued” in China. (Reuters)
Outside equities, sterling sat near a one-month low on Tuesday at $1.3489 as traders watched for Bank of England signals and the fallout from U.S. tariffs. Money markets were pricing two BoE rate cuts this year to take the bank rate to 3.25%, and ING’s Chris Turner said talk of a March cut could “firm up” that pricing. A U.S. Customs notice showed a 10% tariff had taken effect just after midnight, though investors still lacked clarity on when a promised rise to 15% might land. (Reuters)
But the rally rests on a narrow set of levers. If tariff-driven inflation keeps rate cuts pushed out, or if gold and industrial metals cool, the same miners and banks that lifted the index can just as quickly drag it back.
After the London close, traders also looked to U.S. tech bellwethers for direction, with Nvidia due to report earnings later on Wednesday. Reuters’ Morning Bid noted that a 5% move in the stock could swing its market value by about $230 billion. (Reuters)
UK investors now turn to March 3, when finance minister Rachel Reeves delivers a budget update alongside new forecasts from the Office for Budget Responsibility. The OBR is expected to trim its short-term growth and inflation projections and publish fresh borrowing numbers, but it will not assess how much headroom Reeves has against her fiscal rules. The watchdog put that buffer at almost £22 billion in November, and analysts estimate it has barely changed since. (Reuters)
