London’s Comeback Day: Mining and Healthcare Lead Market Bounce Back

3 September 2025

The London Stock Exchange Group headquarters in the City of London.Photographer: Hollie Adams/Bloomberg

Markets in London offered a vivid display of resilience on September 3 as stocks rallied following the steepest single-day drop in nearly five months. Bolstered by gains in healthcare, mining, and select industrial names, both the FTSE 100 and the domestically focused FTSE 250 rose by around 0.5 percent by mid-morning, signaling traders' renewed appetite for value sectors.

Investor sentiment appeared to shift on renewed confidence regarding corporate robustness and fiscal oversight. Finance Minister Rachel Reeves announced plans to deliver the annual Budget on November 26, underlining her commitment to a tight rein on public spending “to help lower inflation and borrowing costs.” While reassuring on the surface, markets remain wary about potential tax hikes hampering growth without significant benefit to state coffers.

This cautious optimism was reflected across the bond market where 20- and 30-year gilt yields surged to levels not seen since 1998. These long-dated yields, lured higher by concerns over government finances, put immediate pressure on rate-sensitive sectors even as equity markets regained traction.

Precious metals miners led the charge, tracking gold’s ongoing rally. Fresnillo jumped 6.1 percent and Hochschild Mining climbed 6.5 percent, while major industrial miners like Glencore, Anglo American, and Antofagasta added over 2.5 percent each. This surge reflects investors seeking refuge in asset classes tied to raw materials as inflation and geopolitical concerns persist.

The healthcare sector also contributed to the market lift, with AstraZeneca rising nearly 1.9 percent. Industrial firms such as Rolls-Royce, IAG (owner of British Airways), and Babcock also posted gains as industrial demand expectations lifted sentiment.

Among standout corporate performers, Ashtead gained 1.6 percent on the back of stronger-than-expected first-quarter revenue, while Watches of Switzerland rallied 7.1 percent. The latter’s significant jump reflected confidence in strong U.S. sales and reassurance that American tariffs would not dent its earnings. On the flip side, Hilton Food Group tumbled 18.8 percent after warning of higher costs in its seafood operations and regulatory constraints at its Greek Foppen business.

Despite the rebound, caution lingered. The earlier bond-driven selloff, rising yields, and looming tax pressures underscore lingering fiscal uncertainties. The Bank of England’s leadership also remains on alert; Governor Andrew Bailey, addressing Parliament, downplayed the significance of the yield spike, advising that attention should stay on shorter-term borrowing costs. At the same time, he expressed concern over political interference with central bank independence.

Looking ahead, investors have much to watch. The looming Budget will be scrutinized for spending plans and growth measures. Meanwhile, global bond volatility and gold prices hint that inflation and debt sustainability remain central concerns.