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The UK’s blue chip index broadly held its gains from the previous day on Friday morning, as investors responded to easing borrowing costs and a positive US service sector report.
The FTSE 100 closed up 0.7 per cent higher at 10,831 on Thursday afternoon. Metlen Energy, Informa and LSEG were among the highest blue-chip risers, while Reckitt and Convatec dragged on the index.
“A measure of calm in government bond markets and a slight moderation in oil prices helped steady markets,” said AJ Bell investment director Russ Mould.
Borrowing costs eased on Thursday night after rising gilt yields threatened to overshadow Prime Minister Andy Burnham’s first few days of the new parliamentary session. The yield on 10-year gilts eased to 5.16 per cent from 5.24 per cent on Wednesday, while the 30-year dropped to 5.80 per cent from 5.87 per cent.
Wall Street responded to falling borrowing costs too, as the yield on the US 10-year Treasury narrowed from 4.79 per cent on Wednesday to 4.75 per cent. The yield on the US 30-year Treasury was quoted at 5.23 per cent, down from 5.27 per cent.
Oil prices finished Thursday broadly flat on the day before. Brent crude – the international benchmark for oil prices – ended the day about 0.1 per cent higher at $95 per barrel.
Kathleen Brooks, research director at XTB, said: “As we move into the second half of the week, the oil price is dipping and there are signs of stabilisation in the bond market and in stocks.
“US indices snapped a 3-day losing streak, Asian indices rose overnight and futures prices point to more stabilisation today, with the FTSE 100 expected to open higher. Treasury yields are also easing on Thursday, after the 10-year Treasury yield rose to a multi-year high on Wednesday.”
We’ll be bringing you the latest market updates and analysis.