7th Oct 2026 12:12
(Alliance News) - Stock prices in Europe moved lower on Wednesday, unnerved by rising yields and a robust oil price.
"European markets were in the red as the mood music continues to change daily. One minute investors are upbeat, the next they're not," AJ Bell analyst Russ Mould commented.
The FTSE 100 index fell 80.84 points, 0.8%, at 10,460.85 midday Wednesday. The FTSE 250 lost 74.26 points, 0.3%, at 24,141.07, and the AIM all-share declined 2.48 points, 0.3%, at 781.14.
The Cboe UK 100 fell 0.9% at 1,037.70, the Cboe UK 250 declined 0.2% at 21,004.87, and the Cboe small companies was slightly lower at 18,855.68.
In European equities on Wednesday, the CAC 40 in Paris sank 1.1%, while Frankfurt's DAX 40 plunged 1.3%.
In New York, the Dow Jones Industrial Average is called down 0.4%, the S&P 500 0.2% lower and the Nasdaq Composite down 0.5%.
Wealth Club analyst Susannah Streeter commented: "Brent crude has risen back above USD101 a barrel following attacks by Yemen's Houthi rebels on targets in southern Saudi Arabia, with the fresh escalation reviving concerns about the security of energy supplies. Attacks on ships in and around the Strait of Hormuz have also ramped up, with multiple incidents reported by the UKMTO this week, a Royal Navy-led maritime security monitoring service which has become a key source of information for shipping companies concerned about security. It's clear that traversing the Strait remains dangerous, even though more tankers have been making passage through the waterway."
A barrel of Brent rose to USD101.76 on Wednesday, from USD98.37 late Tuesday afternoon. Gold declined to USD4,116.92 an ounce from USD4,163.00.
Sterling fell to USD1.3221 midday Wednesday, from USD1.3280 at the time of the London equities close on Tuesday. Against the euro, it was at EUR1.1807, rising from EUR1.1791.
The single currency fell to USD1.1192 from USD1.1264. Versus the yen, the greenback bought JPY158.32, rising from JPY158.07.
The yield on the US 10-year Treasury was quoted at 5.33% midday Wednesday, widening markedly from 5.27% at the time of the closing bell on the London Stock Exchange on Tuesday. The yield on the US 30-year Treasury was at 5.71%, stretching from 5.63%. The 30-year hit its loftiest level in almost 25 years.
European bond prices have also struggled. Prices move inversely to yields.
"Renewed pressure in European bonds has sent the euro back below USD1.12, nearly a cent off yesterday's high. Its loss of about 0.6% today leads the G10 currency complex lower," Bannockburn analyst Marc Chandler commented. "British, Spanish, and Portuguese 10-year benchmark yields are up more than 7 bp, while Germany, who reported much stronger than expected industrial output figures is seeing less than a three basis point increase."
"The risk-off impulse from the rising yields is weighing on equities and precious metals."
Still to come on Wednesday are the minutes from September's Federal Reserve meeting, out at 1900 BST.
In London, Shell shares rose 0.6% as it said refining margins rocketed in the third quarter, although margins in its chemicals fell back.
In a trading update ahead of third quarter results, the London-based oil major said the indicative refining margin for the quarter is USD42 a barrel, up from USD24 in the second quarter and rising markedly from USD11.6 on-year.
The indicative chemicals margin is down on-quarter at USD208 a tonne, from USD270. Year-on-year, however, it is up from USD160.
Pennon slumped 22%, dragging peers Severn Trent and United Utilities 2.6% and 1.4% lower. It announced a heavily discounted rights issue and said it was cutting its dividend as it outlined increased investment plans aimed at improving performance.
The Exeter, England-based water utility on Wednesday outlined the results of a strategic review, which Chief Executive Keith Haslett said showed Pennon has areas "where we need to improve and deliver better outcomes".
To address these issues, Pennon said capital investment in the regulated water businesses over AMP8 is now expected to be GBP3.6 billion, around GBP1 billion more than its original plan.
"Investors typically buy shares in utility companies for their dividends, seeing them as a reliable source of income and a bit of capital growth on top. Pennon has rebased its dividend by approximately 30% from the previous year, saying it will now target growth in line with inflation from the new lower level," AJ Bell's Head of Markets Dan Coatsworth commented.
"Investors are not going to like this news one bit, particularly as Pennon has gone cap in hand to ask them for more money."
Elsewhere in London, Likewise shares rose 7.9%. The floor coverings distributor acquired a number of assets from Headlam Group's administrators for GBP14.9 million.
"The acquisition is a significant step for the group. Following Headlam's administration and the acquisition, the board believes Likewise is the largest floor coverings distributor in the UK, with an enlarged brand portfolio, additional freehold distribution capacity and a broader customer base. The acquisition will further support the group in achieving its goal of GBP300 million of revenue in the medium term," Likewise added.
By Eric Cunha, Alliance News news editor
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ShellLikewise GroupHeadlamPennonSevern TrentUnited Utilities