The FTSE 100 dropped sharply on Wednesday as climbing global government bond yields eroded investor appetite for equities across European markets.

The index fell as much as 0.62% during the session, with pressure building across multiple sectors as the U.S. 10-year Treasury yield pushed back near 5.32%.

Germany’s DAX declined 0.83% and France’s CAC 40 shed 0.61%, reflecting a broad risk-off tone that swept through continental markets alongside the British selloff.

Sterling weakened 0.25% against the dollar to trade at $1.3245, adding further uncertainty for internationally exposed companies listed in London.

Miners were among the hardest-hit sectors, tracking weakness across metals markets as gold futures fell 0.75%, spot gold dropped 0.82%, and silver slid 1.31%.

Platinum suffered a steeper decline of 2%, while copper eased 0.36%, compounding losses for the major mining companies that carry significant weight in the FTSE 100.

Financials also came under heavy pressure, with Standard Chartered, HSBC, Barclays, Lloyds, and NatWest all falling over 3% as 30-year gilt yields topped 6%.

Utilities stocks retreated in tandem with the broader rate-sensitive selloff, as higher yields made the sector’s dividend appeal comparatively less attractive to investors.

The U.S. 10-year yield rose from 5.27% at Tuesday’s London close, while the 30-year Treasury hovered near 5.69%, with markets increasingly questioning demand for U.S. government debt.

ING strategists weighed in on the volatile rates environment, stating “we doubt rates will calmly settle at current levels,” signaling further turbulence could lie ahead.

ING’s Warren Patterson also flagged tensions in commodity markets, citing a “clear tug-of-war” between improving Gulf supply and lingering geopolitical threats pressuring oil prices.

Investors were also watching a slate of key market events, including the Federal Reserve’s September meeting minutes, UK gilt tenders, and a $39 billion U.S. 10-year Treasury auction.

The combination of elevated yields, weak metals, and pressure on financial stocks painted a difficult picture for London-listed equities heading into the afternoon session.