London close: FTSE ends down as bond selloff continues
By Michele Maatouk
Date: Wednesday 02 Sep 2026
(Sharecast News) - London stocks ended in the red on Wednesday - albeit off lows - as the selloff in the bond market continued, amid renewed hostilities between the US and Iran.
The FTSE 100 closed down 0.3% at 10,756.45, while Brent crude was up 0.9% at $95.48 a barrel and West Texas Intermediate was 0.5% higher at $90.64 after the US launched a new series of strikes against Iranian targets, prompting Tehran to retaliate with strikes on US bases in Bahrain, Jordan and Iraq.
Danni Hewson, head of financial analysis at AJ Bell, said: "European markets continued to nurse a migraine as the noise from the Middle East continues, putting upward pressure on crude oil prices and government bond yields.
"Some signs that both yields and oil were stabilising meant the FTSE 100 was off its lows but still down materially on the day, while Germany's DAX enjoyed a similar trajectory. Wall Street fared rather better as investors await results from AI chip heavyweight Broadcom.
"With 10-year gilt yields at one point hitting levels last seen in mid-2008 at nearly 5.3%, the spotlight is on chancellor John Healey as he looks to balance the books at next month's Budget.
"Worries about the UK public finances and the economy saw the mid-cap FTSE 250 index underperform its large-cap counterpart thanks to its greater domestic bias, falling to a one-month low.
"Elsewhere in London, data and software firms were on the rack as the usual concerns about AI disruption reared their head and Pearson suffered a broker downgrade, while utilities, property and housebuilder stocks were also out of favour - all sectors which are sensitive to movements in expectations for borrowing costs. Miners and banks were among those to make progress."
In equity markets, oil giant BP was in focus as it announced that Ian Tyler has been appointed chairman, taking up the role immediately following an extensive search that considered both internal and external candidates. Tyler joined the board as a non‑executive director in April 2025 and became interim chair in May 2026.
Halma edged higher as it agreed to acquire Pyxis, a US‑based specialist in water‑quality monitoring technology, in a deal worth an initial $170m (£126m). Halma said that further earn‑out payments of up to $30m may be made depending on Pyxis' performance over the next two financial years.
Educational publisher Pearson lost ground after a downgrade to 'neutral' from 'buy' at Citi. "At the current valuation, the shares fairly reflect the balance of operational momentum with limited upside to short-term consensus," the bank said.
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