U.K. bonds yields tumbled Tuesday, as investors flocked to the perceived safety of government debt amid an intensified siege of Ukraine by Russian forces, and fears of economic difficulties rose.
The 10-year gilt yield
slid 15 basis points to 1.22%, marking lows not seen since late January, and the fastest yield drop since the day of the Brexit referendum in 2016, according to Reuters data.
The yield on the 2-year note
also fell 15 basis points to 0.894%, taking it to the lowest level since mid January.
The FTSE 100 index
fell 1% to 7,383.56, and the pound
dropped 0.3% to $1.3389 as investors flocked to the U.S. dollar. Russia’s bombing campaign of Ukraine stepped up overnight and into Tuesday, with a massive convoy of Russian troops headed toward Kyiv.
The price of U.S. oil
topped $100 a barrel, with Brent
climbing over $104 a barrel over worries of potential fuel shortages. Major energy companies BP
were down under 1% each.
Pharmaceutical companies and mining stocks were among the gainers, with AstraZeneca shares
up over 2%. The Swiss-U.K. company said its rare disease unit Alexion reached a global deal and license agreement with Neurimmune to commercialize an investigational antibody to treat cardiomyopathy.
While Rio Tinto
and Anglo American were on the rise, shares of Russian mining stocks Polymetal
continued to tumble, down 24% and 16%, respectively. With Moscow’s stock exchange closed a second day, Russian companies listings on other exchanges, either secondary or dual listings, have come under intense pressure from intense sanctions on the country and its economy.
Everaz and Polymetal are likely to get kicked out at the FTSE All Share Index Quarterly Review due to be announced on Wednesday.
“Companies in the travel sector which just last week looked like contenders for inclusion in the blue chip index, like easyJet have seen their hopes blown off course,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, in a note to clients.
“The safe haven flight into gold has benefited Endeavour Mining,
which looks set to join the FTSE 100, while the building trade stalwart Howden Joinery
is expected to also join the top flight as investors seek out companies which show more durability in the face of uncertainty on financial markets,” Streeter added.