FTSE 100 movers: Banks and insurers rally as US bond yields surge; ex-divs weigh
London's FTSE 100 was down 0.9% to 7,440.02 in afternoon trade on Thursday amid a surge in US Treasury yields, with ex-dividend stocks also weighing on the main index.
"Higher yields, particularly on assets that are considered risk free (US government bonds) make stocks seem relatively less attractive and the near decade long bull market which has been built on extremely low yields by historical standards, is now facing a serious existential threat," said David Cheetham, chief market analyst at XTB.
Banks and insurers were trading higher as they benefit from rising rates and yields, with Barclays, HSBC, RBS, Lloyds, RSA, Direct Line and Aviva all in the green.
However, yield plays such as Severn Trent and Reckitt Benckiser retreated.
Ocado suffered heavy losses after an off-book trade of 2.18m shares crossed at 915 BST, priced at 903.2p a share versus Wednesday's close of 915p. According to Bloomberg, the trade represents 0.41% of shares outstanding.
Elsewhere, British American Tobacco, Intertek, DS Smith and British Land all lost ground as their stock went ex-dividend.
FTSE 100 - Risers
Barclays (BARC) 174.92p 1.39%
Glencore (GLEN) 337.80p 1.27%
Legal & General Group (LGEN) 259.70p 1.25%
RSA Insurance Group (RSA) 586.80p 1.21%
HSBC Holdings (HSBA) 675.70p 0.99%
Royal Bank of Scotland Group (RBS) 250.50p 0.93%
Direct Line Insurance Group (DLG) 324.30p 0.84%
Aviva (AV.) 481.80p 0.75%
Lloyds Banking Group (LLOY) 58.82p 0.74%
BHP Billiton (BLT) 1,704.00p 0.71%
FTSE 100 - Fallers
Ocado Group (OCDO) 865.80p -5.38%
Burberry Group (BRBY) 1,924.00p -5.13%
Intertek Group (ITRK) 4,772.00p -4.94%
British Land Company (BLND) 582.34p -4.25%
Relx plc (REL) 1,561.50p -3.79%
Severn Trent (SVT) 1,775.00p -3.66%
Reckitt Benckiser Group (RB.) 6,895.00p -3.63%
SEGRO (SGRO) 617.40p -3.62%
British American Tobacco (BATS) 3,443.00p -3.56%
Smith (DS) (SMDS) 474.30p -3.48%