FTSE 100 reverses course on high bond yields, Stanchart leads losses



© Reuters. FILE PHOTO: Canary Wharf stands in London

By Shivani Kumaresan and Amal S

(Reuters) – London’s FTSE 100 shed early gains to end slightly lower on Thursday, as losses in defensive sectors due to higher treasury yields outweighed gains in resource and most banking stocks.

After rising as much as 0.7%, the blue chip fell 0.1%, with defensive sectors, such consumer staples, healthcare and utilities at the forefront of losses.

But Standard Chartered (LON:) was the worst performer on the FTSE 100, tumbling 6.2% after the impact of the COVID-19 pandemic more than halved its annual profit.

Mining stocks, including Rio Tinto (LON:), Anglo American (LON:), and BHP, were the biggest boosts to the FTSE 100, with oil heavyweights BP (LON:) and Royal Dutch Shell (LON:) also providing support on strong crude and metal prices. [MET/L] [O/R]

The domestically focused mid-cap fell 0.5%.

“I think investors are a little uneasy with what we’re seeing in the bond markets in terms of rising yields and the pace at which they’re rising,” said Craig Erlam, senior market analyst at Oanda.

“We’re still lacking a lot of direction until we start to see signs of stabilisation or even a reversal in those yields.”

Stimulus measures have helped the FTSE 100 recover 35% from its March lows. But a corresponding rise in bond yields on higher inflation expectations has weighed on stocks this year.

Yields on 10-year British bonds were at 11-month highs, Refinitiv data showed.

Meanwhile, data showed that the cost of Britain’s furlough scheme reached 53.8 billion pounds ($76.2 billion) last month as the country went back into a coronavirus lockdown.

READ  English pub payment plan draws scorn from landlords

In company news, Hikma Pharmaceuticals (LON:) shed 3.2% even after issuing an upbeat outlook.

Aston Martin gained 6.8% after the luxury carmaker said it expects to almost double sales and move back towards profitability this year.

Anglo American gained 3.9% as it boosted dividends after strong commodity prices helped the miner recover from coronavirus disruptions suffered in the first half of 2020.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here