London, Feb 25, 2026, 17:56 GMT — Market closed
- FTSE 100 notched a new record close, lifted by strength in banking stocks and miners.
- HSBC climbed after the bank raised a major profitability goal.
- Diageo shares tumbled following a trimmed outlook and a reduced dividend.
Britain’s FTSE 100 notched another record close Wednesday, climbing 1.18% to finish at 10,806.41, as HSBC shares soared and miners rallied. HSBC jumped 7.9% after boosting a major profitability target. “The bank has slimmed down to focus on fewer regions,” noted Russ Mould, investment director at AJ Bell. Miners also caught a bid, with precious metal stocks up 3.8% and industrial metal names adding 3.3%. Diageo, however, tumbled 12.7% after its new chief slashed both guidance and the interim dividend. The FTSE 250 added 0.5%. 1
Investors’ mood turned on fresh indications that companies might be figuring out how to coexist with AI rather than just worry about it. “It’s still early in the process,” said Robert Pavlik, senior portfolio manager at Dakota Wealth, who pointed out that despite cost-cutting efforts with AI, companies will likely keep humans involved. 2
Banks and miners took the spotlight in London, since that’s where the index heaviest hits. With that, attention shifted to the trajectory of rates and commodities. Traders are already watching next week’s fiscal update, scanning for anything unexpected.
HSBC bumped its return on tangible equity target up to “17% or better” through 2028. That metric tracks profit as a share of shareholder equity, stripping out goodwill and other intangibles. Chief executive Georges Elhedery described HSBC as “a simple, more agile, focused bank built for a fast-changing world,” capping a year marked by $4.9 billion in one-off charges and a 7% slide in pretax profit, leaving it at $29.9 billion. 3
Mining stocks picked up as precious metals gained ground, with buyers chasing what they see as safe bets. Spot gold advanced 1.1% to $5,205.14 an ounce. Bart Melek, global head of commodity strategy at TD Securities, said the move partly reflects “inflationary impact from tariffs” that’s fueling demand for safety. 4
Newly at the helm, Dave Lewis wasted no time at Diageo, slashing the 2026 organic sales forecast and chopping the interim dividend to 20 cents per share. He pointed squarely at stretched consumer budgets as “by far and away” the main challenge. Guinness supply issues came up, too. The profit warning didn’t just sting Diageo—shares of rival spirits makers also slipped. Half-year results? “Awful,” said AJ Bell’s Dan Coatsworth. 5
Hiscox rolled out a $300 million share buyback after insurance contract written premium climbed 5.9% to $4.98 billion. That number represents the value of policies sold and renewed before any claims hit the books. 6
Aston Martin plans to slash up to 20% of its staff, targeting roughly £40 million in yearly savings as it faces tough U.S. tariffs and sluggish China sales. The automaker is pulling back on its five-year capex ambitions, now pegging the total at £1.7 billion, having pushed out electric-vehicle investments. Tariffs, the company said, have been “extremely disruptive,” while China demand remains “extremely subdued.” 7
Sterling hovered close to a one-month low at $1.3489 on Tuesday, with traders eyeing signals from the Bank of England and reacting to the latest U.S. tariffs. Money markets now expect two BoE rate cuts this year, which would lower the bank rate to 3.25%. Chris Turner at ING said chatter about a possible March cut could solidify those bets. Meanwhile, a U.S. Customs notice confirmed a 10% tariff kicked in just after midnight, but investors were still left guessing about when the anticipated move to 15% would happen. 8
The rally, though, leans heavily on just a handful of factors. Should inflation from tariffs delay rate cuts, or if gold and industrial metals lose steam, those same miners and banks that powered the index higher could just as swiftly pull it down.
Once London markets wrapped up, attention shifted stateside, where Nvidia’s earnings set for release later Wednesday had traders on edge. Reuters’ Morning Bid pointed out that a 5% shift in Nvidia could wipe out or add roughly $230 billion to its market cap. 9
UK investors are now eyeing March 3, as finance minister Rachel Reeves is set to present a budget update with the latest outlook from the Office for Budget Responsibility. Expectations are for the OBR to shave its near-term growth and inflation forecasts and roll out updated borrowing figures. Still, it won’t be taking another look at how much fiscal leeway Reeves has under her own rules. Last November, the watchdog saw that margin at just under £22 billion; analysts reckon not much has shifted since then. 10
