FTSE 100 falls over 1% on rising yields; Rentokil Initial tumbles

By Khushi Singh and Bansari Mayur Kamdar

(Reuters) -London’s FTSE 100 fell on Thursday as a rise in long-term government bond yields and uncertainty around the Middle East conflict kept investors risk-averse, while Rentokil Initial dropped on flagging weaker annual demand in North America.

The commodity-focused FTSE 100 closed 1.2% lower, while the mid-cap FTSE 250 fell 1.1%.

The London Stock Exchange said it was investigating an incident and that only FTSE 100, FTSE 250 and IOB securities were available for trading.

Rentokil tumbled 18.6% to the bottom of the FTSE 100 after the pest control firm forecast full-year performance slightly below the previous outlook due to softer demand in North America, its biggest market.

The broader industrial support services index fell 5.2%, touching its lowest level in over a year.

Also weighing on the FTSE 100, the British 10-year government bond prices fell to a new two-month low as they extended a sharp selloff driven by Wednesday’s higher-than-expected inflation data and higher oil prices.

“Higher oil prices due to the geopolitical crisis in the Middle East will result in inflationary pressures, which is not helping the yield space,” said Giles Coghlan, chief market analyst at GCFX Ltd.

Ten-year gilt yields, which move inverse to prices, rose as high as 4.726% and hit their highest level since Aug. 22.

Hargreaves Lansdown shed 6.1% after it reported a slowdown in new client growth for the first quarter.

The investment banking and brokerage services index slid 1.5%.

Asset manager Schroders posted a fall in assets under management for the third quarter, taking its shares down 2.6%.

(Reporting by Khushi Singh and Bansari Mayur Kamdar in Bengaluru; Editing by Sonia Cheema, Eileen Soreng and Alison Williams)