FTSE Rebounds and Gilts Steady as the Oil Panic Fades
London’s FTSE 100 recovered on Friday, rising around 0.7 per cent to about 10,710, as oil’s retreat from $100 eased the previous day’s inflation scare. Banks led the gains, with HSBC among the risers, while government bond yields dipped and the pound firmed towards $1.334. The rebound clawed back much of Thursday’s sharp, oil-driven sell-off.
The ten-year gilt yield eased to around 5.04 per cent, a few basis points lower, after touching a two-month high, and the volatility gauge fell as calmer nerves returned to markets. The improvement was helped by a run of firmer UK data, including a jump in June retail sales and a survey pointing to stronger business activity. Investors still expect the Bank of England to hold interest rates next Thursday, though the oil shock has muddied the outlook. For borrowers, the steadier bond market is welcome, if fragile. Watch whether the calm survives fresh developments in the Gulf.