London stocks gain on softer oil, easing gilt yields; Defence shares fall

The UK’s FTSE 100 advanced on Tuesday as a retreat in bond yields and softer oil prices calmed investors following last week’s bond-market volatility, while losses in defence stocks capped gains.

The blue-chip FTSE 100 index rose 0.4% to 24,215.33 points, while the midcap FTSE 250 also climbed 0.4%.

Brent crude oil declined 2% as resilient Middle Eastern crude exports and a G7 emergency stockpile release eased supply concerns, although continued security risks in the Middle East limited further losses.

Government borrowing costs also eased after 10- and 30-year gilt yields, surged to multi-decade highs last week, as investors weighed persistent inflation and debt concerns.

Bank of England policymaker Catherine Mann warnedthat inflation has become embedded in the UK economy and could become further entrenched as wage negotiations pick up early next year

Markets see abouta 90% probability of a 25-basis-point or larger BoE rate hike in November, according to LSEG data.

Defence stocks fell, with BAE Systems, Babcock International and Rolls-Royce down between 2% and 4%.

A Times report said the government was considering delaying plans to set out a path towards lifting defence spending to 3% of GDP.

Informa was among top FTSE 100 gainers, rising 3%. The exhibitions group said it would buy events organiser Clarion for £2.24 billion ($2.98 billion) and spin off its Taylor & Francis academic publishing division

“While separating off the academic publishing business means there is little else to support the business if live events struggle, it at least recognises where the real growth in the business will continue to be,” said Chris Beauchamp, chief market analyst at IG.

On the FTSE 250, shipping services provider Clarkson rose 2.2% after forecasting annual underlying pretax profit above market expectations.

ASOS dropped 9.6% after media reports said customers of the online fashion retailer had received push notifications saying it had been hacked and threatening to leak information. The firm said basic personal information might have been accessed but that it did not believe payment-card information or account passwords had been affected.