UK stocks fall as lack of progress in US-Iran talks lifts oil prices
Oil prices rose more than 4% after Yemen's Iran-backed Houthis fired missiles at Saudi Arabia and diplomatic talks between the US and Iran showed little sign of progress.
On Thursday, UK stocks declined as the lack of advancement in US-Iran negotiations caused oil prices to surge to their highest levels in a week. This rise in crude prices heightened global inflation fears and pushed up government bond yields. The FTSE 100 index decreased by 0.24% to 10,679.99 points, while the FTSE 250 fell by 0.85%.
Oil prices surged more than 4% following Yemen's Iran-backed Houthis launching missiles at Saudi Arabia, and diplomatic talks between the US and Iran showed minimal progress. Oil giants BP and Shell experienced gains of 2.6% and 1.7% respectively. However, industrial firms struggled, with Rolls-Royce and BAE Systems dropping 1.3% and 1.5% respectively.
A homebuilder, Vistry, saw a 3.1% decline after it revised its yearly profit outlook downward and announced a £470 million ($622.51 million) loss from its strategic overhaul. The single-board computing company Raspberry Pi saw a remarkable 19.6% increase, following a report of higher first-half revenue and pretax profit. Bond markets, again, drew attention as UK gilt yields rose, reaching a one-week high of 5.38% for the benchmark 10-year gilt.
British finance minister John Healey might accept a smaller fiscal cushion to limit tax hikes in the upcoming budget, according to a report from the Financial Times. Bank of England Deputy Governors Clare Lombardelli and Sarah Breeden indicated the potential for future interest rate increases. The Bank of England Monetary Policy Committee member Swati Dhingra added that winter would be crucial for determining UK inflation risks.
Traders are pricing in at least one 25-basis-point rate hike by the Bank of England this year, based on LSEG data. Additionally, investors are closely watching the Trump-Xi summit, which is perceived as largely symbolic despite efforts to maintain stability between the two nations amid their substantial ideological differences. Insurer Standard Life and technology services provider Computacenter both fell by 4.2% and 4.4% respectively, as their shares exchanged ex-dividend.
Written by urgent.news from Jerusalem Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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