UK shares gain as lower bond yields support sentiment

Fidelity

UK shares rose as lower government bond yields eased pressure on markets and several company updates gave investors fresh reasons to reassess individual stocks.

The FTSE 100 closed 0.7% higher at 10,831.52 points. The FTSE 250 also gained 0.7%, recovering after recently falling to a near one-month low.

A key driver was the move in UK government bonds. The 10-year gilt yield fell 9.5 basis points after reaching an 18-year high in the previous session. Lower yields helped reduce pressure on rate-sensitive sectors and improved the wider market backdrop.

Attention remained on upcoming US employment data. The non-farm payrolls report could shift expectations for interest rates and influence whether the recent improvement in market sentiment continues.

UK economic data also offered some support. The services sector expanded for a second month in August and business confidence improved. That provided a more constructive domestic signal, although interest-rate expectations and global market conditions remain important risks.

Banks rose 1.4% as bond yields eased. Precious metal miners gained 3.4% as gold and silver prices strengthened. Healthcare stocks added 0.6%, with AstraZeneca up 1.4%.

Fidelity Special Values PLC (LON:FSV) aims to seek out underappreciated companies primarily listed in the UK and is an actively managed contrarian Investment Trust that thrives on volatility and uncertainty.

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