FTSE 100 Slumps Amid Dovish BoE and Miner Merger Woes

The FTSE 100, Britain's blue-chip index, closed down 0.9% on Thursday. Investors were adjusting to the Bank of England's more dovish comments, indicating possible future rate cuts, despite the current holding of rates at 3.75% by a narrow 5-4 vote. Banking stocks felt the impact, with major lenders like HSBC, Lloyds Banking Group, and NatWest dropping between 2.3% and 6% as investors braced for potential rate adjustments.

The mining sector also took a hit as Glencore shares slid after Rio Tinto announced the end of takeover talks, resulting in a 7% decrease for Glencore and a nearly 2.6% drop for Rio Tinto. This marked the third unsuccessful merger attempt between the two firms. Similarly, Shell reported disappointing fourth-quarter profits, which fell short of expectations, dropping 11% amid lower crude prices, causing its stock to decrease by 3.4%.

Adding to the uncertainty was political tension surrounding Prime Minister Keir Starmer's appointment of Peter Mandelson as U.S. ambassador, despite Mandelson's controversial ties. On a brighter note, the technology sector experienced a rebound, led by gains from analytics company Relx and the London Stock Exchange Group.