FTSE 100 Falls as Oil Tops $95 and UK Bond Yields Climb Further
London stocks ended lower on Wednesday as oil prices climbed above $95 a barrel and government bond yields pushed higher, while investors remained cautious ahead of Friday’s key US jobs report.
The FTSE 100 fell 32.83 points, or 0.3%, to 10,756.45, extending Tuesday’s decline. Selling was heavier further down the market, with the FTSE 250 dropping 0.8% to 24,324.06 and the AIM All-Share losing 0.8% to 790.01.
Oil remained a major source of concern after Iran launched attacks against US sites across the Middle East following an extensive American bombardment. Iran’s Revolutionary Guards said US bases in Jordan, the UAE, Kuwait, Bahrain and Iraq’s Kurdistan region had been targeted.
Brent crude rose to $95.40 a barrel around the London close, compared with $92.48 on Tuesday, keeping concerns over inflation and the potential for tighter monetary policy firmly in focus.
Bond yields consequently remained under pressure. The UK 10-year gilt yield rose to 5.24% from 5.22%, while the 30-year yield increased to 5.87% from 5.85%. In the US, the 10-year Treasury yield climbed to 4.79% and the 30-year to 5.27%.
Interest-rate markets are now pricing more than three UK rate increases by July, according to XTB, with the first potentially arriving in November and Bank Rate expected to reach around 4.26% by February.
Wall Street performed better despite the geopolitical uncertainty. The Dow Jones Industrial Average was up 0.6%, while the S&P 500 and Nasdaq Composite both gained around 0.5% during London afternoon trading.
Among individual FTSE 100 stocks, InterContinental Hotels Group rose 3.1% after UBS upgraded the Holiday Inn owner to ‘buy’ from ‘neutral’, while NatWest gained 0.6% following an upgrade to ‘overweight’ from Morgan Stanley.
Pearson fell 2.2% after Citigroup downgraded the education group to ‘neutral’, while Kingfisher, Computacenter, Metlen Energy & Metals, Experian and London Stock Exchange Group were among the blue-chip market’s largest fallers.
Further down the market, TT Electronics jumped 10% after forecasting 2026 adjusted operating profit ahead of market expectations. First-half adjusted operating profit increased 37% to £18.5 million.
Jadestone Energy gained 4.6% after Prima Energy announced that it had acquired a stake of more than 28% in the oil and gas producer, while stating that it did not intend to make a takeover offer.
Attention on Thursday turns to a series of composite PMI readings, including the UK at 9.30am BST, alongside US jobless claims, trade figures and the ISM services PMI. M&G and Jet2 are among the UK companies scheduled to update investors.
