FTSE 100 Closes +0.13% at 10,505 as Iran Optimism Eases Oil; BP -2.7%, IAG +3.1%
The FTSE 100 closed up 13.62 points, 0.13%, at 10,505.01 on Wednesday. The FTSE 250 ended up 0.3% at 23,384.98; the AIM All-Share rose 0.1%. Oil prices eased markedly as investors eyed signs that the US and Iran were closing in on a deal that would open the Strait of Hormuz. The oil price fall hit BP (-2.7%) and Shell (-2.3%). On the plus side: International Consolidated Airlines (IAG, British Airways owner) gained 3.1%; JD Sports Fashion rose 5.1%; Marks & Spencer climbed 4.3%; housebuilder Barratt Redrow gained 2.3% as bond yields cooled. Brent crude fell 3.6% to $96.61 a barrel; Sterling traded at $1.3429.
The UK 10-year gilt yield fell 4 basis points today and is down 34 basis points from the 13 May peak of 5.17%. The gilt-yield rally is being driven by three factors: lower oil-driven inflation expectations, softer fiscal-rule tone from Burnham’s campaign commentary, and a Tony Blair intervention warning Labour against a “lurch to the left”. The US 10-year Treasury yield narrowed to 4.47% from 4.51%; the US 30-year ebbed to 5.00% from 5.03%. Gold traded at $4,439.66 an ounce, down from $4,504.21 on Tuesday. The euro firmed against the dollar at $1.1633.