FTSE 100 comes under pressure as rising bond yields fuel investor nervousness
The FTSE 100 falls towards 10,450 as rising UK bond yields overshadow energy support and raise concerns over housing, financing costs and consumer spending.
Chief Market Analyst
The FTSE 100 is trading at around 10,450 points on Thursday. Growing nervousness among investors is also weighing on UK equities. The positive effects of rising energy prices are being overshadowed by higher UK government bond yields. The combination of persistently high crude oil prices and rising financing costs could soon begin to have a noticeable impact on both the UK housing market and consumer spending.
The recently announced initiatives to support housebuilding in the UK depend heavily on the financing environment. The global trend towards higher bond yields is therefore no longer merely acting as a ceiling on equity markets, but is increasingly beginning to put direct pressure on share prices.
A potential reallocation away from equities and towards bonds over the coming quarters could have a lasting impact on stock markets. Against this backdrop, the current nervousness among investors is entirely understandable.
FTSE 100 remains resilient as energy exposure provides support
The FTSE 100 holds near 10,712 as investors favour energy exposure, while mixed mortgage and consumer credit data do little to dent its September resilience.
