The FTSE 100 Index fell sharply today as military action in the Middle East stoked oil prices and saw more than 1% sliced off its value.
London’s top-flight dropped 95.6 points to 6895.3 as Gulf tensions led to a widespread sell-off dragging all but a handful of stocks down as the buoyant mood that had seen it surge above the 7,000 landmark last week evaporated.
Air strikes by Saudi Arabia and its allies on rebel targets in Yemen triggered fears of disruption to oil supplies in the Middle East, causing the price of Brent crude to lift by 5% to just below 60 US dollars a barrel.
Oil stocks initially rose but were later also caught up in the broad sell-off as BP fell 2.2p to 446.1p although oil and gas services firm Weir Group added 9p to 1777p and topped the paltry list of just three risers in the index.
The pound was a cent up at 1.36 against the weakening euro, which hit by continuing concerns over the Greek debt crisis. Sterling was lower against the US dollar at just over 1.48.
France’s CAC 40 and Germany’s DAX were also in the red but the falls were much less steep. New York’s Dow Jones Industrial Average was down too.
In London, a number of travel and leisure stocks were also on the back foot due to the reversal in the recent trend towards lower fuel costs.
They included low-cost airline easyJet, which dropped almost 3%, or 53p to 1837p, despite a positive trading update from the low-cost carrier.
The airline said it expects an improved pre-tax profit performance in its usually weaker first half due to rising demand and favourable currency movements.
Shares in British Airways owner International Airlines Group also fell 3% – off 20.5p to 587p – and cruise ship operator Carnival dipped 21p to 3024p.
London Stock Exchange Group led the fallers after Borse Dubai sold its entire 17% stake in the business, ending a relationship dating back to 2007. Shares dropped nearly 6%, or 143p, to 2395p.
Elsewhere, shares in Lloyds Banking Group were 1% lower after the Government announced that it had sold another £500m of stock in the bailed-out lender, talking its stake below 22%. Shares fell 0.8p to 79.7p.
Outside the top flight, SuperGroup surged 6% after chief executive Euan Sutherland announced a series of measures in the Superdry owner’s drive to create a global lifestyle brand.
The company is taking control of its US operations by terminating an existing licence agreement and has announced a fashion collaboration with Idris Elba in time for this year’s Autumn/Winter collection.
SuperGroup also cheered investors by pledging to introduce dividend payments in its 2016 financial year. Shares lifted 57.5p to 991p.
The biggest risers on the FTSE 100 Index were Weir Group up 9p at 1777p, Hikma Pharmaceuticals up 10p at 2194p and Randgold Resources up 20p at 4902p.
The biggest fallers on the FTSE 100 Index were London Stock Exchange down 143p at 2395p, ARM Holdings down 47p at 1080p, Schroders down 136p at 3207p and St. James’s Place down 34p at 945p.