UK stocks rebounded on Wednesday after recording their steepest daily decline in nearly five months during the previous session. Investors had been rattled by concerns over Britain’s fiscal health.
The FTSE 100 and the midcap index each gained 0.7% at the close. Tuesday’s losses came as rising gilt yields fueled anxiety about the UK’s ability to control its finances. The 30-year gilt yield had climbed to its highest level since 1998.
Bank of England Governor Andrew Bailey sought to ease worries, telling a parliamentary committee that investors should “not over-focus” on long-dated debt, since the government raises little financing from that maturity.
Finance Minister Rachel Reeves confirmed she will deliver the annual budget on November 26. She stressed that keeping a “tight grip” on public spending would help reduce inflation and borrowing costs.
Sector movers
Precious and industrial miners gained, supported by rising gold and base metal prices. Hochschild Mining surged 7.6% to its highest level since 2013 after announcing the sale of its Chile-based Volcan gold project operator. Anglo American rose 2.3% after proposing to sell its remaining stake in Valterra Platinum.
Healthcare and bank stocks also provided strong support. Banks have been under pressure since last week after a think tank suggested taxing lenders as a potential way to raise revenue.
Energy stocks weighed on the market. Shell and BP both fell about 1.3% as oil prices slipped.
Elsewhere, Watches of Switzerland climbed 6.1% after confirming it was on track to meet first-half forecasts, boosted by strong U.S. demand. By contrast, Hilton Food Group plunged 17.4% after warning of higher costs in its seafood business and regulatory curbs at its Greek subsidiary, Foppen.
Economic backdrop
A survey showed the UK services sector grew at its fastest pace in over a year in August, driven by a rise in new business.
Globally, softer-than-expected U.S. job openings data added to speculation that the Federal Reserve could cut interest rates soon.
