FTSE 100 hits three-month low as surging bond yields hit risk appetite
By Anand Gopal R
Oct 1 (Reuters) - UK's FTSE 100 fell to a three-month low on Thursday in broad-based declines as a sharp rise in global bond yields to multi-decade highs fanned inflation concerns and dampened investor sentiment.
The blue-chip FTSE 100 index .FTSE fell 1.48% to 10,448.78 points by 1008 GMT, headed for its fourth straight session of losses, while the midcap FTSE 250 .FTMC 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 climbed to 5.449%, its highest since 2007 GB/
Cyclical stocks came under stress as the surging yields reinforced worries that persistent inflation could keep interest rates higher and weigh on 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, senior market analyst, StoneX
Financials were the biggest drag on the FTSE 100. Banks .FTNMX301010 fell 2.9% to their lowest in more than three months
Banking major HSBC HSBA.L declined 3.2%, while Standard Chartered STAN.L fell 2.5%
Energy sector .FTNMX601010, consumer-focused personal care stocks .FTNMX452010 and beverages sector .FTNMX451010 were among the laggards
Traders are currently pricing in a 95% chance that the Bank of England increases borrowing costs at its November meeting, according to data compiled by LSEG, mirroring rate hikes from central banks globally
Oil prices rose around 2% after China suspended oil product exports, potentially tightening fuel markets already coping with supply shortages globally
On the data front, British house prices posted their weakest annual growth since December 2025, underscoring the impact of higher borrowing costs
Homebuilder stocks .FTNMX402020 declined 2.9%
Among other movers, construction materials company Breedon Group BREE.L slid 4.1% after naming James Brotherton to succeed Rob Wood as group CEO