FTSE 100 muted as energy gains offset broader drag; Iran, Xi visit watched

Sept 23 (Reuters) - London's FTSE 100 was muted on Wednesday as oil prices rebounded to over $100 a barrel, reviving inflation worries and pushing up global bond yields as the focus remained on any developments around the Middle East conflict.

The blue-chip FTSE 100 index was little changed at 10,705.26 points, while the midcap FTSE 250 slipped 0.7%. The latter marked its steepest one-day fall in nearly two weeks.

• Oil prices rose after five straight sessions of losses, surpassing $100 a barrel. Energy stocks climbed 2.2% with oil majors BP and Shell rising 2.7% and about 2% respectively. [O/R]

• Yields on global government bonds soared, with the 10-year US Treasury note yield up at 5.083%, its highest since 2007. Yield on the benchmark British gilt rose to 5.353%.

• The first known indirect talks between the US and Iran in months raised hopes for progress toward ending the Middle East conflict, though neither side signalled a shift in stance.

• Most sectors on the FTSE indexes closed lower. Pharma stocks were the biggest drag on the index with a 1.5% fall, with AstraZeneca and GSK shedding 1.9% and 1.1% respectively.

• On the flip side, industrials stocks rose, powered by a 1.4% gain in Rolls-Royce. The aerospace and defence sector also added 1.4%.

• Market attention was on Washington as Chinese President Xi Jinping begins a three-day visit, with trade, technology and Tehran tensions in focus.

• Among individual stocks, JD Sports slid 5.7% after the sports and fashion retailer reported around a 20% drop in first-half profit, becoming the top loser on the benchmark index.

• Two sources told Reuters that Pollen Street had explored options, including a potential sale to scale up its asset management business. The private capital firm topped the mid-cap index with a 12.5% rise.

• A survey showed growth in British business activity cooled this month and inflation pressures built, an awkward backdrop for finance minister John Healey ahead of his first budget next month.

(Reporting by Anand Gopal in Bengaluru; Editing by Nivedita Bhattacharjee and Chris Reese)