- FTSE 100 30 points lower at 10,669
- Wall Street headed back into the red
- Bond yields spike
15:03: Back from the abyss
European shares stayed under pressure on Tuesday, with rising oil prices and bond yields weighing on sentiment, though Germany's DAX edged 0.06% higher to 25,457.
The FTSE 100 has clawed back much of its early loss but remains firmly in the red, up 73 points from its session low yet still 30 points lower.
Banks were the biggest drag, with Standard Chartered off 1.7% and Aberdeen down 2.6%.
The mid-cap FTSE 250 has lost its earlier momentum too, slipping 8 points to 23,826 as investors stay cautious.
Across the Atlantic, US markets opened lower but modestly so, the Dow down 118 points at 52,303.
Higher oil, rising Treasury yields and jitters over AI demand did the damage, with the Federal Reserve's rate decision looming on Wednesday.
Brent crude is up 1.94% at $107.73 a barrel. Sterling slipped 0.14% to $1.3481.
12.30: UK blue-chips off their lows
London's blue-chips are having a jittery Tuesday, though it could be worse.
The FTSE 100 sat 39 points lower as the afternoon session got under way, well off its session lows as bargain-hunters crept back in.
Traders have two headaches to nurse. First, the US Federal Reserve looks set to raise interest rates on Wednesday for the first time in more than three years, with markets now pricing the odds at a punchy 93%. Second, Silicon Valley is having an existential crisis in public.
The row kicked off when Dario Amodei, boss of AI lab Anthropic, warned in a weekend essay that the technology might, eventually, wipe us all out. Sam Altman agreed. Elon Musk agreed. Nvidia's Jensen Huang rolled his eyes and called the extinction talk fiction.
Investors voted with their feet, dumping AI stocks and piling into the dollar, which nudged a two-week high.
Throw in oil stuck above $100 a barrel and bond yields brushing 5%, and you have a market watching the clock.
10.30: London slides as bond yields bite
London stocks took a knock on Tuesday morning, with the FTSE 100 down 78 points, or 0.76% and the FTSE 250 off 137 points at 23,697.
Climbing bond yields and stubbornly high oil prices soured the mood, while soft Chinese data piled on the gloom ahead of the Federal Reserve's decision.
UK unemployment held at 4.9%, a shade below the 5% forecast. Gilt yields pushed higher across the board.
Bucking the trend, Kier Group rose more than 2% to 253.20p after full-year results beat expectations and management struck an upbeat note.
9.05: Financials under pressure
Six financial companies ranked among the FTSE 100’s seven biggest fallers on Tuesday morning as rising government bond yields and expectations of tighter monetary policy pressured the sector.
The FTSE 100 fell 95 points in the first hour of trading.
The sector’s weakness followed a renewed rise in British government borrowing costs. The benchmark 10-year gilt yield moved above 5.4% on Monday, its highest level since July 2007, while the 30-year yield reached 5.93%, a level last recorded in 1998.
Rapid increases in yields can reduce the value of bonds held by financial institutions, lift funding costs and heighten concerns about the ability of households and companies to service debt.
Investors have consequently shown a preference for defensive businesses considered less exposed to changes in economic activity. Pharmaceutical and consumer-staples stocks outperformed on Monday as banks and housebuilders retreated, according to a Reuters market report.
The rotation remained visible at Tuesday’s opening, with GSK edging 0.32% higher while financial stocks populated the bottom of the blue-chip index.
Aberdeen Group the financial-sector retreat, dropping 3.24% to 238.80p, while Intermediate Capital Group PLC declined 2.62% to 1,821p.
Barclays fell 2.47% to 466.70p and Standard Chartered lost 2.26% to 2,247p. St James’s Place PLC was down 2.18% at 1,100p, while Lion Finance Group retreated 1.94% to 13,150p.
Glencore, down 1.90%, was the only non-financial company among the seven largest fallers.
8.15: Total wipeout
Monday's gains have been largely wiped out, with London shares down 59 points amid heightened geopolitical worries (see below).
Preview: Blue-chips called lower
London looks set for a soggy start, with the spread betting firms pencilling in an 18-point fall for the FTSE 100.
Blame oil, which is loitering near recent highs after Saudi Arabia issued, then hastily lifted, danger alerts for six cities including the Red Sea export port of Yanbu.
Things got so twitchy that Costco, the American warehouse giant, has nearly doubled the price of its motor oil and started rationing shoppers to two bottles a week.
China offered little cheer, with factory output beating forecasts but retail sales, investment and house prices all heading the wrong way.
Asia split down the middle, as Japan's Nikkei bounced on SoftBank while South Korea's Kospi sagged.
Traders now brace for Wednesday's Federal Reserve verdict, where a rate rise is very much in play.
