UK equities traded lower on Tuesday as London markets reopened following the bank holiday weekend, with investors assessing higher global bond yields, developments in the Middle East and domestic shop price inflation data.

The FTSE 100 fell 0.3% to around 10,798 points, following declines across European equity markets during Monday’s session, when UK markets were closed.

Higher oil prices provided some support for energy companies including Shell and BP, while housebuilders, consumer stocks and mining companies traded lower.

Global bond yields move higher

Moves in fixed-income markets formed part of the backdrop for Tuesday’s equity trading, with the benchmark 10-year Japanese government bond yield reaching a generational high.

U.S. Treasury and European borrowing costs also increased following comments from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium on Friday.

Higher bond yields can affect the relative valuation of equities by increasing the returns available on fixed-income assets and raising borrowing costs.

Brent crude approaches $91 amid Middle East developments

Investors were also monitoring developments involving the U.S. and Iran following military exchanges over the extended weekend.

U.S. forces carried out strikes against Iranian rocket launchers on Larak Island in the Strait of Hormuz, followed by Iranian missile strikes against U.S. military bases in Jordan.

Brent crude moved towards $91 per barrel as markets assessed the potential impact of the conflict on shipping through the Strait of Hormuz.

The increase in oil prices supported shares of some energy companies while adding to market attention on the potential effect of higher energy costs on inflation.

Bunzl gains following half-year results

Among individual London-listed companies, Bunzl (LSE:BNZL) rose 1.8% after the distribution and services group reported its half-year financial results.

The company was among the gainers in a session in which the FTSE 100 traded moderately lower.