London close: FTSE ends well off highs as US markets drop, Treasury yields jump

(Sharecast News) - London stocks ended well off their highs on Tuesday as markets across the pond came under pressure and as US Treasury yields shot higher amid concerns about inflation.

The FTSE 100 closed up just 0.1% at 10,330.55, while Brent crude was down 0.9% at $111.05 a barrel.

Axel Rudolph, chief technical analyst at IG, said: "European stock indices began the day on a strong footing, adding to Monday's solid gains on hopes of de-escalation in the Middle East, but were dragged down by their US peers. These came under pressure after the US 10-year Treasury yield rallied to a 16-month high and the 30-year yield to levels last seen in July 2007.

"High energy prices, a pick-up in inflation and robust economic backdrop increased bets on the Fed hiking rates this year, putting pressure on stocks. Yields rose globally with Japanese borrowing costs hitting record highs and those of long-dated bonds in the UK rising towards 1998 levels."

UK stocks had enjoyed solid gains for most of the session, kicking off firmly in the black as investors welcomed news that the US had decided to cancel a military strike on Iran planned for Tuesday.

In a post on Truth Social on Monday, Donald Trump said the US was holding off at the request of several Gulf states, who had told him that a deal with Iran will be made, "which will be very acceptable to the United States of America, as well as all Countries in the Middle East, and beyond".

"This Deal will include, importantly, NO NUCLEAR WEAPONS FOR IRAN," Trump added.

In the same post, however, Trump also insisted the US remains ready to act and is "prepared to go forward with a full, large scale assault of Iran, on a moment's notice, in the event that an acceptable Deal is not reached".

Sentiment had also been boosted by a soft UK labour report, which led investors to scale back rate hike expectations.

Figures from the Office for National Statistics showed that unemployment ticked higher in the first quarter, while wage growth slowed.

The unemployment rate in January to March was estimated to be 5.0%, up 0.5 percentage points year-on-year but down 0.1 percentage points on the previous three months. It was marginally higher than consensus of 4.9%.

Annual growth in employees' average regular earnings, which exclude bonuses, was 3.4%, in line with expectations.

ONS director of economic statistics, Liz McKeown, said the latest figures suggest the labour market remains soft, with vacancies at their lowest level in five years and unemployment higher than a year ago.

"The number of payroll employees continued to fall in the three months to March, while regular wage growth slowed further," she said.

"Lower-paying sectors such as hospitality and retail have seen some of the largest falls in vacancies and payroll numbers, both in recent months and over the last year.

"Early estimates of the number of people on payroll in April point to further weakness. However, at the start of the new tax year, these figures carry greater uncertainty and have often seen larger than average upward revisions."

In equity markets, IG Group jumped to the top of the FTSE 100 as it lifted its guidance for 2026 and its medium-term outlook following a strong first quarter.

Diploma surged as it boosted annual guidance for the second time after interim earnings rocketed.

Electricals retailer Currys gained after saying full-year profit was set to be just above guidance as it hailed strong performances in the UK & Ireland and the Nordics.

Food producer Cranswick rose as it hiked its dividend and reported a rise in full-year profit and revenue amid strong demand across its core categories.

Bulmers and Tennent's owner C&C reversed earlier losses to end up even as it reported a drop in full-year profit and revenue.

SSP Group advanced as it backed its full-year outlook despite the impact of the Iran war on travel and said like-for-like sales in the first six weeks of its second half rose 3% compared to 5% in the first two quarters of the fiscal year.

Dr Martens was on the front foot as the iconic bootmaker reported a sharp increase in annual profits as its move to more full-price sales started to pay off.

On the downside, heavily-weighted miners slumped, with Antofagasta, Anglo American and Rio all lower as metals prices, including copper, fell.

Standard Chartered lost ground as it announced plans to cut nearly 8,000 jobs and set higher medium-term profitability targets.

Market Movers

FTSE 100 (UKX) 10,330.55 0.07%

FTSE 250 (MCX) 22,567.97 -0.19%

techMARK (TASX) 5,894.68 0.57%

FTSE 100 - Risers

IG Group Holdings (IGG) 1,742.00p 10.53%

Airtel Africa (AAF) 334.00p 6.78%

3i Group (III) 2,204.00p 5.86%

Burberry Group (BRBY) 1,118.00p 3.23%

Diploma (DPLM) 6,835.00p 3.17%

Smith & Nephew (SN.) 1,157.00p 3.12%

The Sage Group (SGE) 908.00p 2.92%

JD Sports Fashion (JD.) 75.52p 2.80%

DCC (CDI) (DCC) 6,115.00p 2.77%

Severn Trent (SVT) 3,012.00p 2.45%

FTSE 100 - Fallers

Smurfit Westrock (DI) (SWR) 2,680.00p -4.49%

Fresnillo (FRES) 3,193.00p -4.20%

Compass Group 11 (CPG) 31.48p -3.82%

Antofagasta (ANTO) 3,649.00p -3.62%

Anglo American (AAL) 3,657.00p -3.28%

ICG (ICG) 1,779.00p -2.89%

Rio Tinto (RIO) 7,509.00p -2.82%

Metlen Energy & Metals (MTLN) 37.56p -2.57%

Aviva (AV.) 616.20p -2.35%

Standard Chartered (STAN) 1,879.00p -2.21%

FTSE 250 - Risers

Currys (CURY) 145.70p 15.27%

Cranswick (CWK) 5,500.00p 5.36%

C&C Group (CDI) (CCR) 114.80p 5.32%

SSP Group (SSPG) 162.30p 5.12%

Frasers Group (FRAS) 714.50p 3.40%

Dr. Martens (DOCS) 66.40p 3.27%

Kainos Group (KNOS) 846.00p 3.17%

Trustpilot Group (TRST) 243.80p 2.96%

Avon Technologies (AVON) 1,644.00p 2.75%

Hilton Food Group (HFG) 554.50p 2.69%

FTSE 250 - Fallers

Ceres Power Holdings (CWR) 650.50p -9.78%

Raspberry PI Holdings (RPI) 643.00p -7.75%

Aston Martin Lagonda Global Holdings (AML) 45.02p -5.66%

Hochschild Mining (HOC) 576.50p -5.02%

Pan African Resources (PAF) 135.50p -3.90%

Vistry Group (VTY) 254.60p -3.78%

Caledonia Investments (CLDN) 359.00p -3.36%

PPHE Hotel Group Ltd (PPH) 1,512.00p -3.08%

Endeavour Mining (EDV) 4,370.00p -3.02%

XP Power Ltd. (DI) (XPP) 1,734.00p -2.69%