London Shares Plummet as Oil Prices Fuel Bond Yields and Inflation Concerns

London's stock market took a hit on Tuesday, falling to two-month lows due to rising oil prices and global bond yields. The blue-chip FTSE 100 index dropped 0.59% to 10,634.49 points by 1000 GMT, while the midcap FTSE 250 slipped 0.46%. Financials and banking stocks led the decline, with Standard Chartered down 1.7% and Aberdeen dropping 2.6%. The sector's woes were mirrored in mining and commodities, as precious and industrial metal miners fell 1% and 1.7%, respectively.

The surge in oil prices is driving inflation concerns, which have pushed bond yields higher. Global bond yields soared, with the 30-year Gilts reaching their highest level since 1998 at 5.91%. This has made stocks less attractive, prompting a sell-off in London markets. The Bank of England's upcoming policy meeting will be closely watched, as investors expect the central bank to leave interest rates unchanged but signal further increases later in the year.

Despite the market's downturn, some UK companies showed resilience. Wickes Group shares surged 10% after reporting strong third-quarter trading, driven by mid-single-digit growth in retail like-for-like revenue. However, Trustpilot's shares plummeted 13.7% as its decision to leave its earnings outlook unchanged disappointed investors.