The FTSE 100 index is on track for a second straight day of losses, declining by 0.6% in early trading as investor sentiment wavers over rising bond yields and mixed corporate earnings. Key sectors including energy and financials are under pressure.
- FTSE 100 down 0.6% to 8,312.4 points at open on Thursday
- 10-year UK gilt yield rises to 4.23% (+8 bps)
- Barclays (BARC.L) down 1.2%, HSBC (HSBC.L) down 0.9%
- Shell (SHEL.L) down 1.4%, BP (BP.L) down 1.1%
- Only 35% of FTSE 100 stocks trade higher in morning session
- Market sensitivity rising ahead of BoE inflation report
The FTSE 100 opened lower on Thursday, extending its downward trend after a modest fall the previous day. The index traded 0.6% lower at 8,312.4 points during the early session, marking its second consecutive day of declines. This follows a period of consolidation after a brief rally earlier in the week, as markets reassess macroeconomic data and central bank guidance. The pullback is driven by a rise in UK gilt yields, with the 10-year benchmark increasing to 4.23%, up 8 basis points from the prior close. Higher yields have weighed on equities, particularly in high-dividend sectors. Financial stocks, including Barclays (BARC.L) and HSBC (HSBC.L), saw losses of 1.2% and 0.9% respectively, reflecting concerns over margin pressure and the outlook for interest rate cuts. Energy firms also contributed to the downturn. Shell (SHEL.L) fell 1.4% as crude oil prices dipped below $78 per barrel, while BP (BP.L) dropped 1.1%. Despite strong cash flows reported in the fourth quarter, investor caution persists over global demand forecasts and the pace of energy transition investments. The broader market breadth remains weak, with only 35% of FTSE 100 constituents posting gains in morning trade. The decline underscores ongoing market sensitivity to inflation data, geopolitical risks, and shifting monetary policy expectations. With the Bank of England expected to release its latest inflation report later in the week, traders are adopting a cautious stance ahead of potential policy signals.