FTSE 100 Falls 1.5% as Bond Yields Rise
The FTSE 100 dropped 157.01 points on Friday, closing at 10,659.13. Rising bond yields and high energy prices drove the decline.
The FTSE 100 fell 157.01 points on Friday. The index closed at 10,659.13, marking a 1.5% loss. Bond yields climbed as investors reassess interest rate paths.
The FTSE 250 dropped 146.72 points to 24,205.42. The AIM all-share index rose 0.4% to 796.09. For the week, the FTSE 100 remains up 0.1%.
Yields rise after central bank moves
US 10-year Treasury yields reached 5.01%. UK 10-year gilt yields stood at 5.31%, up from 5.21%. The Bank of Japan hiked rates to 1.25% on Friday.
The Bank of England held its rate steady on Thursday. Analysts from Panmure Liberum now expect 25 basis point hikes in November and February. RBC Capital Markets also predicts a November rate increase.
Energy prices weigh on inflation outlook
Brent oil traded at 104.37 dollars per barrel. This is up from 103.65 dollars late Thursday. Higher energy costs threaten to slow disinflation.
Morgan Stanley notes that restrictive policy may weigh on 2027 growth. UK household energy prices are on track to rise 25% in January. This creates risk for broader consumer prices.
Sterling firms on strong retail data
UK retail sales volumes rose 0.5% in August. This beat expectations of a 0.2% decline. The pound traded at 1.3372 dollars on Friday.
Sterling firmed to 1.1661 against the euro. The dollar strengthened to 157.07 yen. Global equities saw mixed results, with the Dow Jones down 0.4%.
