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London stocks dipped on Wednesday as higher U.S. bond yields impacted global equities, while new U.S. data raised concerns about inflation and the timing of Federal Reserve rate cuts. The FTSE 100 fell by 0.9%, reaching a three-week low and signalling its longest losing streak since August 2023. Technicals  suggest that the index may be on the brink of a correction phase, with a drop below the 8,000 mark serving as a clear indicator of this trend. The increase in U.S. 10-year Treasury yields to 4.556% added pressure on equities, as improved consumer confidence data for May indicated persistent inflation, potentially leading to prolonged higher interest rates. The UK two-year gilt yield reached its highest level since February 2023 at 4.555%, while the yield on the 10-year benchmark gilt rose to 4.317%. All attention is now focused on the upcoming release of the Fed's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index data, scheduled for Friday. The market will also closely monitor a speech by Bank of England Governor Andrew Bailey on Thursday. The mid-cap FTSE 250 experienced a  decline. The oil and gas sector managed to limit its losses with a 1.4% increase, as oil prices rose due to expectations of major producers maintaining output cuts.

Fresnillo performed well as JP Morgan Cazenove expressed optimism about the future of the precious metals miner and maintained its 'overweight' rating on the shares. Shell and BP surged amid rumours that OPEC will continue to reduce supply at its meeting on 2 June.

Shares of Anglo American have dropped by 1.3%, reaching their lowest point since April 26, the day after a buyout offer was made. Meanwhile, BHP's London-listed shares have increased by 1.7%. BHP has announced that it requires additional time to communicate with Anglo American regarding its $49 billion offer, ahead of the deadline later in the day. In response to Anglo American's concerns about the offer, BHP has proposed various socioeconomic measures. Anglo's shares have seen a nearly 30% increase year-to-date as of the last close.

On The Beach Group's shares rose by 2.18%  after Berenberg upgraded the stock from "Hold" to "Buy". The upgrade is based on the potential for market share growth in long-haul and premium holiday markets, as well as the company's strong position in the value segment. Berenberg also noted that On The Beach is insulated from downturns due to a lack of inventory and highlighted the positive impact of the distribution deal with Ryanair. The brokerage firm also expects consumer travel demand to remain healthy. According to LSEG data, 9 out of 10 analysts rate the stock as "buy" or higher, with a median price target of 200 pence. Despite a 21.26% decrease in stock value this year, the outlook remains positive.

National Express – Mobico, the owner, experiences a decrease in its stock price by 4.9% to 56.49p following a downgrade from Berenberg to "hold" from "buy". The brokerage also reduces the price target from 100p to 66p, which is the lowest among eight analysts covering the company. Mobico, known for its bus, coach, and rail services, reported a 14% decline in profit for 2023 last month. Berenberg points out that Mobico does not have a revenue problem, but its costs have increased significantly compared to revenue growth, leading to a negative impact on margins. The brokerage expresses uncertainty about the potential for significant share price increase based solely on organic performance over the next 12 months. It acknowledges the possibility of upside from various areas, including the sale of the North America School Bus business, but is sceptical about the terms being attractive. Mobico's stock has now extended its year-to-date losses to approximately 33%.

FTSE Bias: Bullish Above Bearish below 8220

• Above 8270 opens 8340
• Primary support 8000
• Primary objective 8140
• 5 Day VWAP bearish
• 20 Day VWAP bullish

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