FTSE 100 drops as interest rate worries intensify; Diageo top gainer

London’s FTSE 100 fell on Thursday, tracking Asian shares lower after the U.S. Federal Reserve’s hawkish stance added to interest rate worries, while beverage maker Diageo (LON:DGE) was the top gainer on strong half-yearly sales.

The blue-chip FTSE 100 index declined 0.4% with miner Anglo American (LON:AAL) and energy firm BP (LON:BP) among the top drags on the index as they tracked weak commodity prices.

UK’s two-year yields jumped to their highest since 2011 and short-term U.S. yields soared after the Fed signalled a March rate hike with investors pricing in another hike by the Bank of England next week. [BOEWATCH] [MKTS/GLOB]

The domestically focussed mid-cap index fell 1.0% with boot maker Dr. Martens falling the most, down 8.7%, even after it reported an 11% increase in revenue in the key Christmas quarter.

Travel stocks also weighed on mid-caps with British airline easyJet (LON:EZJ) down 1.3% after it said the Omicron variant was impacting its performance this quarter.

Diageo, the maker of Johnnie Walker whisky, gained 1.3% after its first-half sales rose 15.8%.