The FTSE 100 spent another session hugging the 10,700 level after a poor session for US stocks amid inflation and borrowing-cost concerns.
US indices closed lower overnight as fears of further interest rate hikes knocked sentiment, with rising bond yields signalling potentially higher borrowing costs in the near term.
“US equities have spent much of September demonstrating remarkable resilience, but the latest surge in Treasury yields is beginning to test just how much higher borrowing costs the market can tolerate,” said Daniela Hathorn, Senior Market Analyst at Capital.com.
But the FTSE 100 held its own again as its defensive cohort jumped into action, keeping the index largely flat.
“BP and Shell were among the names making progress in London, along with more traditionally defensive stocks. Housebuilders, aviation-linked names and financials were among those losing ground in early trading,” explained Dan Coatsworth, head of markets at AJ Bell.
“This followed a sell-off on Wall Street last night and mixed trading in Asian markets ahead of a planned meeting between President Trump and Chinese premier Xi Jinping.”
Donald Trump has set the tone for trading so far this week, and that’s likely to continue into the weekend, with markets awaiting further developments in the Middle East.
UK traders held off making big bets on Thursday, with single stocks setting the tone. JD Sports has had a choppy week, which continued as the sports retailer topped the FTSE 100 leaderboard with a 2% gain, bouncing back from selling pressure yesterday.
As Dan Coatsworth noted, oil companies were among the best performers, helping even out the index as financials and stocks trading ex-dividend weighed.
BP rose 1.8%, while Shell ticked up 1.5%. Supermarkets Tesco, Sainsbury’s and Marks & Spencer were among other FTSE 100 stocks in favour.
Standard Life was the biggest loser after it lost the right to its latest dividend.