U.K. stocks stretched a winning streak Monday, as gains for financial shares helped leave the London benchmark for blue chips at its highest since early February. The FTSE 100 index claimed a 0.4% rise to end at 7,398.87. That’s the strongest closing level since Feb. 2, according to FactSet data. The index has risen for five straight sessions, the longest run of wins since early March. Telecom, oil and gas and financial shares moved up, but utility stocks put in the worst performance, clipped as bond yields rose. The benchmark last week rose 1.4% as the pound crumbled. Sterling slid after disappointing economic data and after Bank of England Governor Mark Carney cast doubt on a May interest rate hike. On Monday, the pound continued to fall, buying $1.3946 compared with $1.3999 late Friday in New York. In the fixed-income market, the yield on the U.K.’s 10-year gilt rose 3 basis points to 1.526%, according to Tradweb. Advances for bank and insurance stocks helped the FTSE 100 overcome choppy action. Analysts have said rising bond yields, and lower bond prices, are reflecting speculation that higher prices for commodities could prompt the U.S. Federal Reserve tospeed up its pace in raising interest rates.
While higher interest rates can bolster shares of banks and insurers world-wide, they can weigh on broader equity markets, as borrowing costs for companies go up and investors may ditch equities in search of higher returns.
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