Rising yields, tariff uncertainty pressure UK's FTSE 100

March 6 (Reuters) - The UK's FTSE 100 closed lower on Thursday as rising bond yields pressured equities and continued uncertainty over U.S. tariffs clouded the outlook for global markets.

The blue-chip FTSE 100 .FTSE dropped 0.8%, while the domestically focussed FTSE 250 .FTMC climbed 0.2%.

Banking shares were the biggest drag, with the sector .FTNMX301010 falling 2.7% after rising 1.8% on Wednesday.

UK gilt yields continued to rise amid a global bond selloff sparked by Germany's plans to loosen fiscal spending rules. Both the 10-year GB10YT=RR and two-year yields GB2YT=RR touched their highest since January before easing.

Financial markets have been choppy this week after U.S. President Donald Trump's rapid-fire tariff policies dented consumer and business confidence and sank stock markets globally.

U.S. Commerce Secretary on Thursday hinted at tariff reprieve for more goods imported from Mexico and Canada after Trump on Wednesday exempted the auto sector from tariffs for a month.

Data showed the UK construction sector contracted sharply last month. The preliminary reading of the S&P Global/CIPS UK Construction Purchasing Managers' index fell to 44.6 last month from January's 48.1, its weakest level since May 2020 and below forecasts from economists polled by Reuters.

Real estate .FTUB3510 and REITs .FTNMX351020 fell about 1% each but the construction & materials sector .FTNMX501010 rose.

Reckitt Benckiser RKT.L rose 2.1% as the Dettol maker's fixed costs declined to 20.9% of net revenue in 2024 from 21.8% a year earlier.

Melrose Industries MRON.L dropped 18.2% to the bottom of the FTSE 100 after the aerospace parts supplier forecast 2025 revenue below expectations.

Schroders SDR.L gained 12.6% after the money manager outlined plans to cut 150 million pounds ($194 million) from its costs over the next three years.

Admiral Group ADM.L gained 5.2% after the insurer posted a record annual profit and said it was in talks to sell its U.S. business.

 
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