Markets wrap: FTSE 100 falls as bond yields jump, sterling falls agains the US dollar (GBPUSD) and bitcoin (BTC) swings
The FTSE 100 today fell to its worst weekly performance since the summer in spite of the weaker pound – usually a boon to big multinationals with big dollar earnings.
London’s blue-chip index lost more than 0.6 per cent to reach 7,443.43 points, its lowest close since 14 December to cap a week in which it lost more than 200 points.
UK-listed miners led the daily declines, with Evraz suffering the biggest fall, closely followed by Glencore.
Shares in Vodafone were among the most buoyant on the index, after it confirmed it is in talks with media and communications company Liberty for an asset swap.
FTSE 100
Risers
%
Fallers
%
Astrazeneca
3.07
Glencore
-4.26
Vodafone
2.38
Evraz
-3.85
Admiral Group
1.56
Johnson Mathey
-2.85
Smurfit Kappa
1.50
IAG
-2.66
Direct Line
0.94
Anglo American
-2.49
The FTSE’s weakness has “naturally sparked questions of whether a larger correction is in store,” said Jasper Lawler, head of research at London Capital Group. “The market has reached some new extremes in sentiment during January and certain risk-factors, notably the rise in bond yields, could point to further stock market declines.”
Sterling also fell away from recent highs against the US dollar, losing more than one per cent at the time of writing to hit lows of $1.4201.
UK bond yields rose to their highest point since before the vote to leave the EU amid a broad sell-off of government debt around the world. The yield on the UK 10-year gilt broke through the 1.6 per cent mark for the first time since April 2016.
The rise in bond yields, which has seen the US 10-year Treasury approach the symbolic level of three per cent, has come after signs of increasing inflation in developed economies.
Meanwhile, traders in the less mainstream cryptocurrency markets saw wild swings in value. Bitcoin today fell below the $8,000 mark, before recovering to approach $9,000 at the time of writing.
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