Update: The FTSE 100 slid 0.9% as travel and economically sensitive stocks such as banks retreated in response to the joint strikes by US and Israel on Iran at the weekend.
However, gains by London-listed oil stocks as crude prices jumped more than 7% supported the UK blue-chip index, which fell less heavily than its European counterparts. French, German and Spanish indices fell 1.6%, 1.7% and 2.6% with the EuroStoxx 50 benchmark off 2%.
Conference organiser Informa was the biggest early faller in the FTSE 100, sliding 8.5%. It was followed by BA owner International Consolidated Airlines Group which pared back an 11% slump to trade around 6% lower. Specialist chemicals manufacturer Croda shed 5.5% and Barclays and Standard Chartered banks declined around 5%.
However, defence and energy stocks buoyed the FTSE 100 with BAE Systems up 5.4% and oil majors Shell and BP 3.6% and 2.6% higher.
It was a similar story on the FTSE 250 with the “mid-cap” index falling 1.3%, weighed down by 6.9% to 10.5% declines in airport shop operator WH Smith, cruise shipper Carnival and PPHE Hotel Group.
Upward pressure came from oil explorers Ithaca Energy and Harbour Energy rallying 7.9% and 3.6%. BlackRock World Mining Trust (BRWM), at £1.9bn the biggest and most liquid of the listed mining funds, gained 3.1%, helped by a spike in commodity prices and gold rising 2% to a fresh high of $5,380.55 an ounce as the precious metal performed its customary role as a safe haven in troubled times. BlackRock Energy Resources and Income (BERI), a £197m stablemate, advanced 3.4%. Baker Steel Resources Trust (BRST) gained 2.7%.
The sell-off spread to Europe from Asia where Hong Kong’s Hang Seng index plunged 2.3%, India’s Sensex slid 2% and Japan’s Nikkei 225 retreated 1.4%.
Iran’s supreme leader Ayatollah Ali Khamenei was killed on Saturday in the first wave of air attacks by the US and Israel, provoking the country into retaliatory missile strikes at targets across the Middle East, including Israel.
Amid fears that the narrow Strait of Hormuz could be blocked, restricting one fifth of global oil and gas supplies, WTI crude oil futures rose more than 7% toward $72 per barrel, an eight-month high, after earlier surging up to 10% higher.
Although Tehran insists the strait remains open, shipping companies have begun rerouting vessels. OPEC+, the cartel of oil-producing nations, agreed on Sunday to increase production by 206,000 barrels per day (bpd) in April. This ends a three-month pause, but is below the 411,000–548,000 bpd it previously considered.
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