April 9 (Reuters) - The UK's FTSE 100 edged lower and mid cap stocks posted a bigger fall on Thursday after recording their strongest session in months a day earlier, as oil prices rebounded on growing doubts over a fragile ceasefire in the Middle East conflict.
The blue-chip FTSE 100 closed 0.1% lower at 10,603.5 points and the FTSE 250 was down 1%.
* The FTSE 350 energy index climbed 2% as oil prices jumpedon concerns that energy flows through the crucial Strait ofHormuz will remain restricted. [O/R] * The viability of the ceasefire is in question amidcontinued Israeli strikes on Lebanon, causing Iran to suggest itwould be "unreasonable" to proceed with talks to forge apermanent peace deal. * The FTSE 100 recorded its biggest daily percentage gain ina year on Wednesday after the deal between the U.S. and Iran fora two-week ceasefire. * Rate-sensitive homebuilders came under pressure as bondyields edged higher. The two-year gilt yield, which reflectsnear-term rate expectations, rose to 4.221% a day after itslargest one-day fall since March 2023. * Traders were betting on around 34 basis points of ratehikes from the Bank of England by the end of this year, comparedto 32 bps on Wednesday. * Britain's housing market cooled noticeably last month aseconomic uncertainty stemming from the Iran war unnerved buyerswho face rising mortgage rates, a survey from the RoyalInstitution of Chartered Surveyors showed. * Ceres Power Holdings fell 6.2% after brokerage Peel Huntdowngraded the clean energy technology developer's stock to"sell" from "hold." * Insurer Standard Life and speciality chemicals maker CrodaInternational dropped more than 3% each, as their shares weretrading ex-dividend.
(Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Sahal Muhammed)
