UK shares rise as softer oil, easing gilt yields lift sentiment

UK Shares Advance as Easing Gilt Yields and Lower Oil Prices Lift Sentiment

Market Overview and Key Drivers

FTSE Indices Performance

Oct 6 - London'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, with financial and consumer staples shares leading the gains.

The blue-chip FTSE 100 index rose 0.5% to 10,554.51 points by 1030 GMT, while the midcap FTSE 250 also climbed 0.5%.

Major Influences on Market Sentiment

Oil Prices and Supply Concerns

• Oil prices declined as resilient Middle Eastern crude exports and a G7 emergency stockpile release eased supply concerns, although continued security risks in the region limited further losses [O/R]

Bond Yields and Inflation Expectations

• 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

• Markets are now pricing in a 90% chance of a Bank of England rate hike at its November meeting, according to LSEG data

Sector Performance

• Among sectors, heavyweight financials and consumer staples led the gains on the FTSE 100

Company and Sector Highlights

Defence Sector Developments

• A Times report said the government is considering delaying plans to set out a path towards lifting defence spending to 3% of GDP. Defence stocks fell, with BAE Systems, Babcock International and Rolls-Royce down between 1.1% and 3%

Corporate Announcements and Movers

Informa's Acquisition and Strategy

• Informa topped FTSE 100 gainers, rising 2.8%. The exhibitions group said it would buy events organiser Clarion for £2.24 billion ($3 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

Other Notable Movers

• On the FTSE 250, Clarkson climbed 6% after the shipping services provider forecast annual underlying pretax profit above market expectations

• AstraZeneca rose 2.2%. The drugmaker said it would invest more than $1 billion in Massachusetts as part of its broader $50 billion US investment plan

• Kenmare Resources surged 28% after the titanium minerals miner confirmed it had received a non-binding proposal from International Resources Holdings

(Reporting by Ragini Mathur and Darshan Kumar in Bengaluru; Editing by Shreya Biswas)