(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* British Airways owner rises despite reporting annual loss
* Miners, oil producers lead declines
* FTSE 100 down -2.5%, FTSE 250 off 1.4%
(Updates to close)
By Shivani Kumaresan and Amal S
Feb 26 (Reuters) - The export-heavy FTSE 100 marked its
weakest session since late-October on Friday, snapping three
straight weeks of gains as a broader sell-off in bonds spread to
global equities.
The FTSE 100 slipped 2.5%, tracking losses in Europe
and Asia as surging bond yields sparked fears of higher interest
rates despite assurances to the contrary by the world's major
central banks.
Mining stocks including Rio Tinto, Anglo American
, and BHP, were the biggest drags on the index,
while oil heavyweights BP and Royal Dutch Shell
fell tracking a fall in oil and metal prices.
"As the UK 10-year Gilt yield reaches 0.75%, the UK's
borrowing costs look like they are about to break a 25-year
downtrend at a particularly inconvenient time, something that
will have Boris Johnson and Rishi Sunak a little on edge," said
Russ Mould, director at AJ Bell Investment.
The FTSE 100 lost its momentum through February, gaining
only 1.2% for the month as gains in major mining, energy and
banking stocks on expectations of a vaccine-led economic
recovery were offset by concerns over a quicker-than-expected
spike in inflation causing a tightening of monetary policy.
Bank of England Chief Economist Andy Haldane warned that an
inflationary "tiger" had woken up and could prove difficult to
tame as the economy recovers from the COVID-19 pandemic,
potentially requiring the BoE to take action.
British finance minister Rishi Sunak, who is trying to steer
the economy through a third coronavirus lockdown before an
expected recovery later this year, looks set to rely heavily on
the debt markets again when he announces a budget plan on March
3.
The domestically focused mid-cap FTSE 250 index fell
1.4%, led by declines in industrials and consumer discretionary
stocks.
British Airways owner IAG gained around 3% despite
marking a 7.43 billion euro ($9 billion) loss last year and
warning it could not say when normal flying conditions would
return.
(Reporting by Shivani Kumaresan and Amal S in Bengaluru;
editing by Uttaresh.V and Hugh L)
