Source: Sharecast
At 0835 BST, the FTSE 100 was down 0.5% at 8,747.01.
Stephen Innes, managing partner at SPI Asset Management, said: "Traders woke up to another bruising reminder that bond markets don’t lie - they scream. Wednesday’s botched 20-year Treasury auction didn’t just miss- it detonated, reigniting the sell-off in long-end US rates and ripping a fresh hole in US equity markets."
On home shores, figures from the Office for National Statistics showed that government borrowing rose to £20.2bn in April, up £1bn on the same month a year ago and coming in above the £18bn expected.
It was the fourth-highest figure for April borrowing since records began in 1993.
The data also showed that borrowing for the year to March was £148.3bn. This is £11bn higher than the £137.3bn forecast by the Office for Budget Responsibility but £3.7bn lower than the initial estimate.
Elsewhere, a survey showed that consumer sentiment strengthened in May after the UK secured a key trade deal with the US.
According to the latest consumer sentiment monitor from the British Retail Consortium, expectations for the state of the economy over the next three months improved to -36 from -48 in April.
The personal financial situation also nudged higher, to -12 from -16, although personal spending on retail fell three points to 0 and personal spending overall was unchanged at 10.
Helen Dickinson, chief executive of the BRC, said: "Consumer confidence improved as UK economic growth picked up and geopolitical tensions eased as the US-China trade war began to cool.
"However, it remains far below levels seen last year."
US president Donald Trump unveiled his sweeping global tariff regime on 2 April, with a number of countries - including China and the European Union - imposing their own reciprocal taxes.
However, since then Beijing and Washington have agreed a 90-day truce which has seen both countries slash previously sky-high tariffs on each other’s imports, while at home, the UK signed key trade deals with the US, India and the EU.
Dickinson said: "Only weeks ago, consumers were facing uncertainty arising from Trump’s eye-water tariffs. Fast-forward to today and the UK has trade deals with some of the world’s largest economies.
"While agreements with the US and India may have helped this month’s boost in consumer confidence, it is hoped the latest EU deal will drive further confidence in the outlook for the economy and personal finances."
In equity markets, DCC was the biggest loser on the FTSE 100 as it traded without entitlement to the dividend.
BT Group slumped as it posted an unexpected fall in annual revenues and pointed to further declines over the coming year.
Budget airline easyJet fell as it posted a first-half loss before tax of £394m, in line with consensus, and said forward bookings for the third quarter were 80% sold.
The company added that current bookings are supportive of performance meeting full-year consensus estimates, but it remained mindful that, "consistent with this stage each year, there is still an important booking period for peak summer to go".
Intertek and British Land also lost ground after results, while Sainsbury’s was knocked lower by a downgrade to ‘hold’ at Jefferies.
Bloomsbury Publishing tanked as the Harry Potter publisher said full-year pre-tax profit fell 22% to £32.5m.
On the upside, Marks & Spencer shot to the top of the FTSE 100 after an upgrade to ‘buy’ at Jefferies.
Johnson Matthey surged as the chemicals firm said it had agreed to sell its Catalyst Technologies business to Honeywell for £1.8bn.
Toby Carvery owner Mitchells & Butlers rallied after saying it expects annual earnings to be at the top end of estimates, and that underlying sales in the last 10 weeks had risen 6%.
Market Movers
FTSE 100 (UKX) 8,747.01 -0.45%
FTSE 250 (MCX) 20,896.40 -0.25%
techMARK (TASX) 4,772.89 -0.24%
FTSE 100 - Risers
Marks & Spencer Group (MKS) 380.00p 1.41%
SSE (SSE) 1,776.50p 1.17%
JD Sports Fashion (JD.) 84.06p 1.13%
Fresnillo (FRES) 1,090.00p 0.46%
Pearson (PSON) 1,221.50p 0.37%
Haleon (HLN) 414.80p 0.27%
BAE Systems (BA.) 1,823.50p 0.25%
GSK (GSK) 1,433.50p 0.24%
Babcock International Group (BAB) 892.00p 0.22%
Reckitt Benckiser Group (RKT) 4,909.00p 0.22%
FTSE 100 - Fallers
DCC (CDI) (DCC) 4,580.00p -4.06%
BT Group (BT.A) 162.75p -3.84%
easyJet (EZJ) 549.20p -2.73%
Bunzl (BNZL) 2,376.00p -2.70%
Intertek Group (ITRK) 4,798.00p -2.48%
Kingfisher (KGF) 302.90p -2.26%
Whitbread (WTB) 2,807.00p -2.16%
Barratt Redrow (BTRW) 458.90p -2.09%
Taylor Wimpey (TW.) 118.15p -1.75%
Experian (EXPN) 3,815.00p -1.70%
FTSE 250 - Risers
Johnson Matthey (JMAT) 1,847.00p 32.97%
QinetiQ Group (QQ.) 460.00p 4.59%
Syncona Limited NPV (SYNC) 88.50p 3.15%
Mitchells & Butlers (MAB) 282.50p 2.36%
Grafton Group Ut (CDI) (GFTU) 1,032.60p 1.87%
Dunelm Group (DNLM) 1,198.00p 1.87%
Hochschild Mining (HOC) 277.00p 1.39%
Endeavour Mining (EDV) 2,190.00p 1.30%
Me Group International (MEGP) 213.00p 1.19%
JPMorgan Japanese Inv Trust (JFJ) 608.00p 1.16%
FTSE 250 - Fallers
Bloomsbury Publishing (BMY) 544.00p -16.44%
British Land Company (BLND) 389.00p -5.49%
Raspberry PI Holdings (RPI) 507.05p -4.69%
Close Brothers Group (CBG) 341.00p -4.54%
AO World (AO.) 101.20p -4.17%
IntegraFin Holding (IHP) 310.00p -3.13%
Frasers Group (FRAS) 688.00p -3.10%
Zigup (ZIG) 344.00p -2.82%
NextEnergy Solar Fund Limited Red (NESF) 66.50p -2.49%
Tate & Lyle (TATE) 588.50p -2.40%