London stocks slide as rising gilt yields weigh; Reckitt gains

Business Recorder reported that London's FTSE indexes slipped on Tuesday after Middle East tensions lifted bond yields around the world on inflation worries. By 1019 GMT the export-focused FTSE 100 had dropped 1% to 10,725.6 points, a two-week low, while the FTSE 250, which is more tied to the home market, had lost 1.9%. That midcap gauge was set for its steepest single-day fall since March.

The United States and Iran exchanged fresh fire, pushing Brent crude above $92 a barrel and triggering a global bond sell-off as investors weighed the effect on the world economy. The 10-year UK Gilt yield reached its highest level since 2008, and markets now expect the Bank of England to raise rates by a minimum of 32 basis points before the year closes, up from about 24 basis points last week, according to LSEG-compiled data.

Rate-sensitive stocks bore the brunt, with Barclays down 3.4%, Standard Chartered 1.4% lower and Prudential off 1.3%. Housing and construction shares fell 3.3%, while precious metal miners slid 7.1%, the steepest sector loss, as metal prices retreated with rising yields. Energy producers BP and Shell gained 3.9% and 1.6% on higher crude, and Reckitt Benckiser rose 4.4% after a US jury sided with the company in a case over claims its premature baby products failed to warn about a deadly bowel disease.