LONDON: British shares were subdued on Tuesday as a drop in bond yields across Europe dragged financials stocks down, while data showed manufacturing activity grew at its fastest pace since 1994 as businesses tried to make up for lost ground during the pandemic.

The blue-chip FTSE 100 index fell 0.7%, with bank stocks, including HSBC Holdings, Barclays PLC and Standard Chartered Plc posing the biggest drag on the index.

Heavyweight oil majors BP and Royal Dutch Shell gained 2.3% and 1.1% respectively. The stocks provided the biggest boost on optimism about higher demand as economies reopen.

The domestically focused mid-cap FTSE 250 index shed 0.6%.

The FTSE 100 has gained more than 7.4% year-to-date as investors flocked to energy and materials stocks that are seen benefiting the most from a stronger economic recovery due to speedy COVID-19 vaccine rollouts and government policy support.

Meanwhile, data showed April PMI rose to 60.9 in April. All eyes now are on the Bank of England policy meeting on May 6, where it will likely ease its foot off the stimulus pedal and reduce its pace of bond purchases. Among other stocks, dollar-earning large companies Diageo, Imperial Brands and British American Tobacco gained as the pound softened.