FTSE 100 falls to new month-low as bond yields climb

London’s top flight moved 0.63%, or 46.67 points, lower to finish at 7,310.21.

London’s top flight moved 46.67 points lower to finish at 7,310.21 (James Manning/PA) (PA Wire)

The FTSE 100 hit its lowest levels for a month as rising bond yields and a number of ex-dividend announcements knocked back trading in London.

Imperial Brands, Anglo American, Berkeley, GSK and Abrdn all went ex-dividend during the session, pressing on their shares.

London’s top flight moved 0.63%, or 46.67 points, lower to finish at 7,310.21.

Across Europe, bond yields have weighed on all the major markets due to concerns about how long interest rates will remain high due to persistent inflation.

Germany’s Dax index was 0.71% lower for the day and the Cac 40 closed down 0.94%.

Not only are US 10-year yields closing in on their highest levels since 2008, but UK gilts already have, pushing above their October peaks

Michael Hewson, CMC Markets

Michael Hewson, chief market analyst at CMC Markets, said: “The continued rise in global yields has put downward pressure on equity markets in Europe today.

“Not only are US 10-year yields closing in on their highest levels since 2008, but UK gilts already have, pushing above their October peaks, while German 10-year yields are closing in on their highs back in March.

“The FTSE 100 looks set for its fifth successive daily decline on the back of a combination of the higher yield scenario mentioned earlier, as well as several companies going ex-dividend, including Abrdn as it continues to slide in the wake of its disappointing H1 earnings update earlier this week.”

Stateside, markets were shaky due to yields and weakness in Europe, with the tech-focused Nasdaq falling most heavily.

Meanwhile, sterling gained against weakness in the dollar, with the Norwegian krone the best performing currency after the Norges Bank hiked interest rates again.

The pound was up 0.15% to 1.274 US dollars and was 0.23% higher at 1.172 euros at market close in London.

In company news, BAE Systems shares slid as shareholders were not impressed by its £4.4 billion deal to buy Ball Aerospace, a company which supplies parts to the James Webb telescope and the US’s fighter jets.

BAE hailed the move as a “unique opportunity to add a high-quality, fast-growing, technology-focused business” but the deal appeared to raise concerns there may now be less cash to hand out to investors.

Shares were down 46.7p at 955.8p.

Bingo and casino firm Rank Group dipped in value after it took a £119 million hit in impairment charges because many of its venues had not performed as well as hoped.

The firm also reported that Mecca Bingo benefitted from wetter weather this summer but still saw shares decline by 1.4p to 88p.

Elsewhere in the gambling sector, Ladbrokes owner Entain slid by 59.5p to 1,174p after US casino giant MGM, which has been regularly touted as a potential suitor for Entain, said it is using subsidiary Leo Vegas’s tech to launch betting app BetMGM in the UK.

The price of oil made a modest rebound after three consecutive days of losses.

A barrel of Brent crude oil rose by 1.31% to 84.54 US dollars (£66.23) at the time markets were closing in London.

The biggest risers in the FTSE 100 were Rio Tinto, up 77p at 4,636p, Glencore, up 4.05p at 423.55p, Smith & Nephew, up 9.5p at 1,082.5p, Lloyds, up 0.33p at 42.42p, and Centrica, up 1.05p at 144.35p.

The biggest fallers in the index were Ocado, down 45p at 767.4p, Entain, down 59.5p at 1,174p, BAE Systems, down 46.7p at 955.8p, Abrdn, down 8.05p at 165.9p, and Melrose, down 17p at 503.2p.