UK shares mixed as pressure from miners, yields offsets homebuilder rally 

UK Shares Mixed: Miners Fall, Homebuilders Rally Amid Bond Yield Spike

Market Overview and Sector Performance

By Anand Gopal R and Avinash P

Sept 28 (Reuters) - London's FTSE 100 inched lower on Monday as weaker metal prices and rising bond yields kept risk appetite in check, while a rally in homebuilders, after the British government announced an incentive scheme for first-time homebuyers, lifted the FTSE 250.

The blue-chip FTSE 100 index closed 0.10% lower to 10,684.88 points, while the midcap FTSE 250 climbed 0.31%.

Mining and Metals Sector

• The precious metals sector declined 4.9%, while industrial miners dropped 1.2% on lower gold and copper prices. [GOL/] [MET/L]

Gold and Copper Miners

• Gold miners Fresnillo and Endeavour Mining dropped 5.1% and 4.4%, respectively, while copper miners Glencore shed 1.7% and Anglo American slid 1.9%.

Energy and Bond Yields

• Oil prices climbed more than 3% after the US rejected an Iran peace plan, reinforcing inflation fears and higher interest rates worldwide.

Bond Yield Movement

• Reflecting those concerns, the yield on the British 10-year government bond rose to its highest since July 2007. [GB/]

Bank of England's Stance

• Separately, Bank of England Deputy Governor Dave Ramsden said persistently high inflation was having an impact on his thinking about interest rates.

• Traders are expecting at least one quarter-point rate hike by the BoE this year, according to data compiled by LSEG.

Homebuilders and Domestic Stocks

• The household goods & home construction index surged 10% to a six-month high helping limit losses on the FTSE 100, after the government confirmed plans to include a loan programme in next month's budget to boost home sales.

Government Incentives and Sector Response

• “The UK government's new equity loan scheme could be the catalyst the UK homebuilding sector has been waiting for. While the finer details will matter, anything that lowers the deposit barrier for first-time buyers should translate into stronger demand", Jack Fletcher-Price, equity analyst at Morningstar, said.

Key Homebuilder Performances

• Barratt Redrow jumped 11.7%, while Persimmon, Taylor Wimpey and Bellway added between 15% and 10%, boosting the domestically focused FTSE 250.

Other Notable Movers

• Ladbrokes owner Entain slid 5% after warning Brazil's ban on online sports betting and gaming would hurt its 2026 online gaming revenue growth.

(Reporting by Anand Gopal and Avinash P in Bengaluru; Editing by Harikrishnan Nair and Andrew Heavens)