Key facts
- The FTSE 100 is expected to open higher on Friday.
- Borrowing costs eased on Thursday, with 10-year gilt yields falling to 5.16%.
- US Treasury yields also declined, with the 10-year yield at 4.75%.
- Oil prices remained broadly flat, with Brent crude at $95 per barrel.
- The FTSE 100 closed up 0.7% on Thursday.
The FTSE 100 is poised for a higher opening on Friday, with futures from investment platform IG indicating a jump. This follows a period of market stabilization driven by easing borrowing costs and a moderation in oil prices. On Thursday, the UK's blue-chip index closed up 0.7% at 10,831. Metlen Energy, Informa, and LSEG were among the top risers, while Reckitt and Convatec weighed on the index.
Borrowing costs saw a decrease on Thursday evening. The yield on 10-year gilts eased to 5.16% from 5.24% on Wednesday, and the 30-year yield dropped to 5.80% from 5.87%. This easing occurred despite earlier concerns about rising gilt yields potentially overshadowing Prime Minister Andy Burnham's initial days in the new parliamentary session.
Wall Street also responded positively to the falling borrowing costs. The yield on the US 10-year Treasury narrowed from 4.79% on Wednesday to 4.75%, and the 30-year Treasury yield was quoted at 5.23%, down from 5.27%. Oil prices finished Thursday broadly flat, with Brent crude, the international benchmark, ending the day approximately 0.1% higher at $95 per barrel.
Kathleen Brooks, research director at XTB, noted signs of stabilization in bond markets and stocks, with US indices snapping a three-day losing streak and Asian indices rising overnight. She indicated that FTSE 100 futures point to further stabilization, with Treasury yields also easing after a multi-year high on Wednesday.