The FTSE 100 in the UK experienced a decline, reaching a three-month low on Thursday, driven by widespread downturns. This movement was largely influenced by a significant increase in global bond yields, which have reached multi-decade highs, thereby heightening inflation concerns and negatively impacting investor sentiment.
The blue-chip FTSE 100 index fell 1.48% to 10,448.78 points by 1008, marking its fourth consecutive session of losses, while the midcap FTSE 250 slipped 1.23%.
- Yield on the British 30-year gilt surged to its highest since early 1998 at 5.9773%. The benchmark 10-year gilt rose to 5.449%, marking its highest level since 2007.
- Cyclical stocks experienced pressure as rising yields heightened concerns that ongoing inflation may sustain elevated interest rates, potentially hindering economic growth.
- “(The selloff) is much more to do as well with concerns over the fiscal outlook of the UK as we head towards the budget later this month,” said Fiona Cincotta
- Financials constituted the most significant impediment to the FTSE 100. Banks fell 2.9% to their lowest in more than three months.
- Banking major HSBC declined 3.2%, while Standard Chartered fell 2.5%.
- The energy sector, consumer-focused personal care stocks, and the beverages sector were among the laggards.
- Traders are currently assigning a 95% probability to the Bank of England raising borrowing costs at its November meeting, based on data compiled by LSEG, reflecting similar rate hikes from central banks worldwide.
- Oil prices increased approximately 2% following China’s suspension of oil product exports, which may further constrict fuel markets that are already grappling with global supply shortages.
- On the data front, British house prices recorded their weakest annual growth since December 2025, highlighting the effects of elevated borrowing costs.
- Homebuilder stocks declined 2.9%.
- Among other movers, construction materials company Breedon Group slid 4.1% after naming James Brotherton to succeed Rob Wood as group CEO.
