FTSE 100 Live: Blue-chips expected to open lower amid Iran turmoil; Spring Statement set to add to the mix
- FTSE 100 down 150 points at 10,630
- Brent hits $80 amid Iran uncertainty
8.20am: Index tumbles 150 points as Middle East conflict deepens
The Footsie fell further than predicted on Tuesday, dropping 150 points to 10,630 as escalating conflict in the Middle East rattled investors and sent oil prices to their highest level in more than a year.
This comes on top of Monday’s sharp decline, prompted by the US-Israeli military campaign against Iran, which stretched into a fourth day.
Brent crude, the international oil benchmark, broke through $80 per barrel for the first time since January 2025 after the Strait of Hormuz, through which roughly a fifth of the world’s oil passes, was effectively stalled, and Saudi Arabia’s largest refinery was temporarily shut following a drone strike.
Defence and energy stocks were among the few gainers, with sentiment towards BP and Shell strengthening sharply on the back of rising oil prices.
Derren Nathan, head of equity research at Hargreaves Lansdown, the investment platform, said the picture for both companies was complex.
He noted that while neither has production in Iran, BP’s operations in Iraq and Abu Dhabi risk being bottlenecked by Strait of Hormuz disruption, and Shell faces similar exposure through its liquefied natural gas facilities in Qatar and the Emirates.
The analyst added that both companies’ trading arms could benefit significantly from the volatility, with Shell’s balance sheet strength leaving it better placed to weather a prolonged disruption.
US futures pointed lower after Wall Street ended Monday flat, with technology stocks outperforming as Nvidia, Palantir and Microsoft all gained, while consumer stocks fell on fears that surging commodity prices could reignite inflation.
Gold slipped slightly in early trading after closing more than 1% higher on Monday, with the precious metal hovering around $5,300 per ounce within reach of all-time highs, though expectations for Federal Reserve interest rate cuts are fading as inflationary pressures build.
Ahead of the open
The FTSE 100 is predicted to open 86 points lower on Tuesday as global markets reel from the escalating US-Israeli military campaign against Iran.
Stock markets across the Asia Pacific suffered steep losses, with South Korea’s KOSPI, the region’s best-performing index this year, plunging 7.2% in afternoon trading.
Japan’s Nikkei 225 fell 3% and Australia’s ASX 200 dropped 1.3%.
Airlines bore some of the heaviest losses, with Korean Air falling more than 9% and Japan Airlines sinking about 6% after carriers cancelled thousands of flights to the Middle East.
The sell-off came despite Wall Street holding firm overnight, with the benchmark S&P 500 closing flat and the tech-heavy Nasdaq edging up 0.36%.
Oil prices surged as much as 13% on Monday before easing, with Brent North Sea Crude up about 2.2% at 04:00 GMT amid fears that Iran could close the Strait of Hormuz, a critical shipping lane for global energy supplies.
European gas prices soared as much as 50% after QatarEnergy, the state-owned Qatari energy company, halted production following Iranian attacks in the region.
UK markets face an additional source of uncertainty today as Chancellor Rachel Reeves delivers her Spring Statement, which will include a new economic outlook but no formal fiscal update.
Analysts expect no significant changes to the government’s fiscal position, though UK markets have shown particular sensitivity to political uncertainty in recent months.
