UK stocks fall as lack of progress in US-Iran talks lifts oil prices
EWU•London shares fell as crude prices rose on little progress toward a US-Iran deal, fuelling inflation concerns and lifting government bond yields. The FTSE 100 fell 0.05% to 10,700.05 points, while the FTSE 250 slipped 0.60%.
1. UK shares decline
The FTSE 100 fell 0.05% to 10,700.05 points by 1007 GMT, while the FTSE 250 slipped 0.60%. Oil prices extended gains after rising 4% in the previous session as US-Iran talks showed no concrete sign of progress. BP gained 1.9% and Shell added 1.4%, while Rolls-Royce fell 2% and BAE Systems dropped 1.3%.
2. Company moves
Homebuilder Vistry fell 6.3% after lowering its annual profit expectations and saying its strategic overhaul would cost £470 million. Raspberry Pi rose 7.7% after reporting higher first-half revenue and pretax profit. Standard Life and Computacenter fell 4.3% and 3%, respectively, as their shares traded ex-dividend.
3. Yields and rates
The 10-year gilt yield reached a more than one-week high of 5.38% as UK yields rose in line with global bond yields. Bank of England Deputy Governor Clare Lombardelli said rates would likely have to rise if energy prices stayed elevated, barring clear evidence of a weaker economy. Traders were fully pricing in at least one 25-basis-point rate hike this year.
