London stocks ended lower on Monday as rising gilt yields weighed on sentiment, with investors also assessing the first speech from new UK Prime Minister Andy Burnham and the beginning of his senior team reshuffle.
The FTSE 100 closed 0.7% lower, while the FTSE 250 fell 0.3%, as bond markets remained under pressure with the UK 10-year gilt widening to 5.04% on Monday afternoon from 4.97% late on Friday.
The US 10-year Treasury yield also increased to 4.59% from 4.53% on Friday, while the 30-year Treasury yield rose to 5.11% from 5.06%, adding to concerns around higher borrowing costs.
Among the biggest FTSE 100 movers, Computacenter was the strongest performer, rising 5.6% after Berenberg upgraded the technology services company to a ‘buy’ rating. The broker said the company could continue to outperform current profit expectations, supported by stronger momentum in North America and the UK, alongside improving conditions in Germany.
Berenberg noted that while Computacenter shares had already performed strongly following its first-half results, there was still potential for further growth as improving sales momentum could translate into stronger profitability.
WPP also featured among the notable FTSE 100 movers, while Ryanair shares fell 4.6% after the airline warned that geopolitical tensions, higher fuel costs and weaker pricing would continue to affect its outlook.
The Irish carrier reported a 34% fall in profit after tax to €538 million for the three months to the end of June, down from €820 million a year earlier and below market expectations. Revenue increased slightly to €4.38 billion, helped by a 6% rise in passenger numbers to 61.3 million, although this was offset by lower average fares.
Revenue per passenger declined 5%, while ancillary revenue increased 5% to €1.47 billion as passenger growth supported additional spending.
On the FTSE 250, self-storage group Big Yellow Group slipped 0.3% despite reporting a resilient first-quarter performance. Revenue increased 3.3% to £53.2 million, but the company warned that fiscal and budget uncertainties could continue to create a challenging operating environment until later in the year.
Chief Executive Jim Gibson said the company remained aware of the pressures facing the sector, particularly while wider economic conditions remain uncertain.
On the AIM market, Sunrise Resources gained 11% after announcing a new copper-silver-gold project in Nevada. The Lake Copper-Silver-Gold Project is located in Churchill County within the Lake Mining District, an area known for hosting several major gold and silver deposits.
European markets were mixed, with Paris’ CAC 40 closing slightly higher and Frankfurt’s DAX 40 adding 0.1%.
In the US, equities were mixed as investors turn their attention towards upcoming earnings from major technology companies.
The Dow Jones Industrial Average fell 0.5%, while the S&P 500 gained 0.1% and the Nasdaq Composite rose 0.3% as semiconductor shares recovered ahead of results from companies including Alphabet, Intel, IBM and Tesla.
Investors are looking for further evidence that artificial intelligence spending is translating into stronger earnings, following recent sector rotations and volatility among chip manufacturers.