UK stocks pull back after rally on Middle East ceasefire doubts
April 9 (Reuters) - The main UK stock indexes eased on Thursday after recording their strongest session in months a day earlier, as oil prices rebounded on growing doubts over a fragile ceasefire in the Middle East conflict.
The blue-chip FTSE 100 .FTSE dipped 0.3% by 0927 GMT, while the midcap FTSE 250 .FTMC slipped 1.1%.
The FTSE 350 energy index .FTNMX601010 climbed 1% as oil prices LCOc1, CLc1 jumped almost 3% on concerns that energy flows through the crucial Strait of Hormuz will remain restricted. O/R
Viability of the ceasefire is in question amid continued Israeli strikes on Lebanon, causing Iran to suggest it would be "unreasonable" to proceed with talks to forge a permanent peace deal.
The FTSE 100 .FTSE recorded its biggest percentage gain in a year on Wednesday after the two-week ceasefire deal between the U.S. and Iran.
Rate-sensitive homebuilders .FTNMX402020 came under pressure as bond yields edged higher. Two-year gilt yield GB2YT=RR, which reflects near-term rate expectations, rose to 4.25% after its largest one-day fall since March 2023.
Traders were betting on 40 basis points of rate hikes from the Bank of England by the end of this year, compared to 32 bps on Wednesday.
Britain's housing market cooled noticeably last month as economic uncertainty stemming from the Iran war unnerved buyers who face rising mortgage rates, a survey from the Royal Institution of Chartered Surveyors showed.
Ceres Power Holdings CWR.L fell 7.7% after brokerage Peel Hunt downgraded the clean energy technology developer's stock to "sell" from "hold."
ME Group International MEGPM.L climbed 3.7% after the vending machine operator secured a partnership with retailer ASDA to install Wash.ME laundry machines.
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