UK stocks fall as lack of progress in US-Iran talks lifts oil prices

By Reuters News

Sept 24 (Reuters) - London shares fell on Thursday as crude oil prices continued to rise amid little progress towards a US-Iran deal, fuelling inflation concerns and lifting government bond yields.

The blue-chip FTSE 100 index .FTSE fell 0.05% to 10,700.05 points by 1007 GMT, while the midcap FTSE 250 .FTMC slipped 0.60%.

  • Oil prices extended gains after climbing 4% in the previous session as US-Iran diplomatic talks showed no concrete sign of progress. UK's energy giants rose, with BP BP.L gaining 1.9% and Shell SHEL.L adding 1.4%. O/R

  • Industrial stocks were the biggest drags, with Rolls Royce RR.L and BAE Systems BAES.L down 2% and 1.3% respectively.

  • British banks .FTNMX301010 dipped 1%, with heavyweights HSBC HSBA.L and Standard Chartered STAN.L down over 1% each.

  • Homebuilder Vistry VTYV.L slipped 6.3% after it lowered its annual profit expectations and said it would take a £470 million ($622.51 million) hit from its strategic overhaul.

  • Raspberry Pi RPI.L jumped 7.7% after the single-board computing company reported higher first-half revenue and pretax profit.

  • Bond markets were in focus again as UK gilt yields rose in line with global bond yields, with the benchmark 10-year gilt yield hitting a more than one-week high at 5.38%.

  • British finance minister John Healey may accept a smaller fiscal buffer to reduce tax rises in next month's budget as investors signalled the gilt market would not be spooked by a more modest headroom target, the Financial Times reported.

  • Bank of England Deputy Governor Clare Lombardelli said that interest rates will likely have to rise if energy prices stay elevated, barring clear evidence of a weaker economy.

  • Traders are fully pricing in at-least one 25-basis-point hike by the BoE this year, according to data compiled by LSEG.

  • Investors are also focused on the Trump-Xi summit, seen as largely symbolic despite efforts to project stability between both sides amid deep rivalry.

  • Insurer Standard Life SDLF.L and technology services provider Computacenter CCC.L shed 4.3% and 3% respectively, as their shares traded ex-dividend.

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