FTSE 100 Falls as UK Bond Yields Reach 6%

The FTSE 100 fell sharply in early trading on Thursday, October 1, as rising government bond yields weighed on shares, while the FTSE 250 also declined. The benchmark index was down more than 1% at about 10,486 by midmorning, according to a market snapshot, after a mixed session in London the previous day. The same snapshot reported that the yield on 30-year UK government bonds reached 6%, its highest level since February 1998. The US 10-year Treasury yield rose to 5.306% on Wednesday, a level the report said had not been seen since 2007. Bond yields were rising amid concern about persistent inflation, government deficits and increased debt issuance, the report said. Higher yields can raise borrowing costs and affect the value investors place on future company earnings. European shares also fell in Thursday morning trading, with Germany’s DAX down 1.33% and France’s CAC 40 down 1.46%, according to the snapshot. Sterling was reported 0.24% lower against the US dollar. Some shares moved against the broader decline: Rolls-Royce rose 1.9%, while precious-metals miners Fresnillo and Endeavour Mining gained as gold traded higher.