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Banks, energy shares lift FTSE 100

An employee views a FTSE share index board in the atrium of the London Stock Exchange Group Plc's offices in London, U.K., on Wednesday, May 29, 2019. While the FTSE 100 Index has climbed about 15 percent since June 2016 in local currency, it's down in both euro and dollar terms. Photographer: Luke MacGregor/Bloomberg via Getty Images

London’s FTSE 100 rallied from recent losses. This is as a sign of a recovery, saw investors piling into economically sensitive sectors, with energy stocks rising as oil prices hit three-year highs. The blue-chip FTSE 100 index gained 0.9%. This is after three straight sessions of losses. The benchmark UK 10-year bond yield touched a more than two-year high on persisting inflation expectation.

Keith Temperton, sales trader at Forte Securities said that he thinks today is a continuing trade. Since they have had the Bank of England talking about rates, these trades were going on and today with extra spike in yields that is just adding fuel to that sort of asset reallocation. Britain’s post-lockdown economic recovery avoided losing further momentum in September. But companies increased prices at the fastest pace on record. This adds to the signs of rising inflation.

The domestically focused mid-cap index advanced 0.3%. Baker and fast-food chain Greggs provided the biggest support. A jump in oil prices to three-year highs also supported the benchmark index. The FTSE 100 index has gained nearly 9% so far this year. This is because of the support from accommodative central bank policies. The index is around 10% away from its pre-pandemic peaks. Craig Erlam, senior analyst at Oanda said that there’s still massive economic risks mounting in the final months of the year. He thinks that it is going to be an interesting test. But the markets are only going to pull back so far before it generates interest once more. He thinks that they are now approaching that point. Melrose Industries declined 1.1%.

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