UK's FTSE 100 posts biggest weekly drop since April as bond rout rattles investors

FTSE 100 Sees Biggest Weekly Decline Since April Amid Bond Market Volatility

Market Performance and Key Drivers

Oct 2 (Reuters) - The UK's FTSE 100 saw its steepest weekly drop since April on Friday, hurt by a sell-off in government bonds that pushed yields higher and dented risk appetite.

The blue-chip FTSE 100 index closed 0.32% higher on the day at 10,461.95 points, but fell 2.2% for the week. The midcap FTSE 250 also ended the week marginally lower, at 24,194.24.

Bond and Currency Market Volatility

• Wild volatility in bond and currency markets kept investors on edge this week, but weaker-than-expected jobs data on Friday reduced odds of a near-term rate hike by the US Federal Reserve, reassuring investors

Commodities and Energy Sector Movements

Oil Prices and Energy Supply Concerns

• Oil prices fell 2% after a sharp rise a day earlier following reports of talks in Europe on additional diesel and crude stock releases, easing concerns over tight global energy supplies [O/R]

Gilt Yields and Homebuilders

• Gilt yields dropped, with the benchmark 10-year gilt yield falling 4.09 basis points to 5.3624% after climbing to its highest since 2007 in the previous session.

• The retreat in yields helped push rate-sensitive homebuilders marginally higher after a 5% drop a day earlier.

Banking Sector and Stock Highlights

Banks Under Pressure

• Still, banks continued to remain under pressure, with the index of UK lenders suffering its biggest weekly drop since April

Notable Stock Movements

Trading Platforms

• Among stocks, IG Group tumbled 22.6% after the online trading platform cut its 2026 revenue growth forecast, citing weak market conditions. Peers Plus 500 and CMC Markets declined 5.1% and 4%, respectively

Mining and Retail Sectors

• Miner Glencore rose 3% after forecasting 2026 marketing profit above $5 billion, surpassing long-term guidance after a near-record first half

• Pub chain J D Wetherspoon climbed 12.5% after reporting stronger sales growth since July, aided by sunny weather, while warning of rising costs and closures

(Reporting by Anand Gopal in Bengaluru; Editing by Shinjini Ganguli and Tasim Zahid)