FTSE keeps sliding

British shares ended lower for the fourth day in a row on Thursday, as global rates worries compounded by concerns of an imminent rise in UK borrowing costs knocked real estate stocks and retailers off their feet. The FTSE closed down 0.8 percent at 6,596 points.
Land Securities fell 3.5 percent, British Land eased 2.8 percent and Hammerson dipped 1.4 percent with traders also citing subsiding bid talk in the sector. DSG International was the index's biggest loser, one day after the company, Europe's biggest specialist electrical goods retailer, said it would not enter the Russian market and announced a 5 percent fall in underlying full-year profits.
DSG was down nearly 4 percent. Elsewhere in the sector, Britain's Home Retail Group fell 2.5 percent. "It's certain there is concern about interest rates domestically," said Roger Cursley, UK strategist at Investec. "Real estate in particular is having a very ugly day, again."
On Wednesday, Bank of England minutes boosted expectations that a UK interest rate hike from 5.5 percent could come as early as next month. Offsetting the downside, Royal Dutch Shell rose 0.6 percent and BG Group gained 0.8 percent as crude prices rebounded.
Also among top gainers, CentricaL put on 0.7 percent, recovering from the previous session's lows ahead of Monday's trading statement and as bid talk resurfaced. One trader said vague talk of Gazprom interest for Centrica had resurfaced. The Russian gas giant denied earlier this month that it was about to buy the British group, and said no deal for a public listed company was imminent.
Fund managers said equities were hostage to bond markets in the short term. The FTSE 100 index is up 6 percent so far this year, underperforming key benchmarks in France and Germany.
"My view is that the equity market remains reasonably attractive in comparison with other asset classes - bonds and commercial property," said Tim Rees, a fund manager at Insight Investment. "However when bond yields move higher, that naturally causes a level of short-term concern to the equity markets."
Rising bond yields in the United States have dampened sentiment in equity markets generally, but analysts are broadly of the view the stock market is holding up quite well given the rate backdrop. Shares in the London Stock Exchange fell nearly 1 percent as its board discussed a share-based offer of about 1.5 billion euros for Borsa Italiana, people familiar with the situation said.