UK markets opened the week with a significant crash following the outbreak of war in Iran. The FTSE 100 index dropped 0.9% to 10,810.50, falling sharply from Friday’s record high of 10,910.55. Sterling also slumped nearly 1%, reaching 1.3354 against the US dollar by 8.14am as panic selling gripped investors.
The turmoil was sparked by Saturday’s Israeli and US airstrikes that killed Iran’s Supreme Leader Ali Khamenei. Tehran responded with swift retaliatory strikes across the region, including attacks targeting the UAE. This escalation has caused traders to fear a prolonged and brutal conflict ahead.
Among the biggest losers were airline and banking stocks. British Airways owner IAG crashed 9.78%, Informa slid 6.7%, and hotel giant IHG dropped 5.3%. Banking stalwarts Barclays, HSBC, and Standard Chartered, along with easyJet and Burberry, all fell more than 4%.
On the other hand, oil and defence stocks saw significant gains. Defence heavyweight BAE Systems leapt 6.9%, while oil giants Shell and BP surged over 5%. Brent crude oil prices shot up nearly 10%, approaching $80 a barrel, and UK natural gas prices rocketed 25% to 98.5p per therm.
Gold prices also climbed 2.4% to $1,940 an ounce, with silver rising 1.7%. However, industrial metals such as copper, coal, and steel slumped, and iron ore prices remained largely unchanged.
Global markets also recoiled amid the heightened tensions. Japan’s Nikkei fell 1.35%, Hong Kong’s Hang Seng dropped 2.32%, and India’s Nifty 50 lost 1.93%, all before London’s turbulent market open.
Chris Beauchamp, chief market analyst at IG, commented, “Global equities are caught in broad-based selling — the FTSE would be 50 points lower without BP and Shell. Markets could be on the edge of a prolonged selloff as investors watch this conflict unfold for weeks.”
Originally published by UKNIP.
