(Sharecast News) - London stocks slid in early trade on Tuesday amid worries about the escalating conflict in the Middle East, with Chancellor Reeves due to deliver her Spring Statement.
At 0840 GMT, the FTSE 100 was down 1.4% at 10,630.21.
All eyes remained firmly on developments in the Middle East, as Israel launched new strikes on Beirut and Tehran, with Israeli defence minister Israel Katz authorising the IDF to advance and take control of "additional strategic positions" in Lebanon.
Meanwhile, US President Donald Trump said during a Medal of Honor ceremony at the White House on Tuesday that he will do "whatever it takes" in Iran and that the conflict could last a month or longer.
"We're already substantially ahead of our time projections. But whatever the time is, it's OK," he said. "Right from the beginning, we projected four to five weeks, but we have capability to go far longer than that."
Susannah Streeter, chief investment strategist at Wealth Club, said: "Downbeat sentiment is pervading equity markets as the conflict in the Middle East escalates, with global repercussions. London's FTSE 100 has fallen deeper into the red as the war widens and companies assess the impact of severe disruption across the region on their operations.
"Airline stocks have sunk further, as the cost of aviation fuel looks set to rise, key routes remain closed, and travellers' confidence takes a significant hit. Mining stocks have fallen back as the edge has been taken off demand for precious metals. The dollar has strengthened, making gold and silver less attractive to buyers in other currencies. The greenback has firmed up amid expectations that the Fed might keep interest rates higher for longer to offset inflationary risks the conflict has sparked.
"Energy costs continue to mount as Lebanon has been drawn into the conflict and Gulf states are still reeling from a barrage of Iranian strikes. Iran is retaliating to attacks from Israel and the US and is now threatening to set fire to ships using the crucial Strait of Hormuz. Given that it's an essential route for around a fifth of global oil and gas supplies, this has sent energy prices even higher."
On home shores, Reeves will deliver the Spring Statement just after midday, while the Office for Budget Responsibility will publish new forecasts for the economy and public finances.
Richard Hunter, head of markets at Interactive Investor, said: "What had been hailed as a quiet spring statement from the Chancellor may now have to include some reaction to the Iranian conflict, although OBR forecasts are likely to remain the main area of focus."
With geopolitics very much the main focus, UK data points seemed of little consequence, but the latest BRC-NIQ monitor showed that shop price inflation rose by 1.1% last month, compared to growth of 1.5% in January. Consensus had been for a 1.2% uplift.
In equity markets, oil giant BP was among a handful of FTSE 100 stocks in the black, with Brent crude above $80 a barrel.
Keller Group was the top riser on the FTSE 250 as it hailed a record full-year performance, ahead of expectations, hiked its dividend and announced a further 100m share buyback.
Financials were under the cosh again, with Prudential, Barclays, Standard Life and HSBC all weaker. BA and Iberia owner IAG also suffered losses again.
Elsewhere, testing and inspection specialist Intertek tumbled even as it forecast further earnings growth following a jump in annual sales and profits.
Fresnillo lost its shine as the precious metals miner reported soaring full-year profit but cut its production outlook for 2026.
Inchcape slumped as it warned that FY26 organic volume growth would be towards the lower end of its 3% to 5% guidance range.
Morgan Advanced and Aberdeen were also in the red after results, while bakery chain Greggs nudged lower as it reported a drop in full-year profit and struck a cautious note on the outlook..
Market Movers
FTSE 100 (UKX) 10,630.21 -1.39%
FTSE 250 (MCX) 23,081.81 -1.46%
techMARK (TASX) 5,977.58 -0.97%
FTSE 100 - Risers
Smith & Nephew (SN.) 1,346.00p 3.33%
Flutter Entertainment (DI) (FLTR) 7,780.00p 1.08%
Entain (ENT) 560.80p 1.05%
BP (BP.) 492.90p 0.80%
Tesco (TSCO) 475.70p 0.74%
Pershing Square Holdings Ltd NPV (PSH) 4,222.00p 0.24%
Rightmove (RMV) 442.20p 0.23%
Sainsbury (J) (SBRY) 343.40p 0.06%
Melrose Industries (MRO) 558.20p 0.04%
Beazley (BEZ) 1,290.00p 0.00%
FTSE 100 - Fallers
Intertek Group (ITRK) 4,268.00p -8.60%
Prudential (PRU) 1,064.00p -4.12%
Antofagasta (ANTO) 4,011.00p -3.22%
Aviva (AV.) 660.00p -3.06%
Barclays (BARC) 423.15p -2.93%
Mondi (MNDI) 824.80p -2.91%
Standard Life (SDLF) 723.50p -2.88%
HSBC Holdings (HSBA) 1,294.60p -2.70%
International Consolidated Airlines Group SA (CDI) (IAG) 389.40p -2.66%
St James's Place (STJ) 1,282.00p -2.65%
FTSE 250 - Risers
Keller Group (KLR) 2,110.00p 5.00%
Bytes Technology Group (BYIT) 307.00p 3.01%
BioPharma Credit (BPCR) 0.97p 2.97%
Ithaca Energy (ITH) 240.00p 2.56%
SDCL Efficiency Income Trust (SEIT) 49.85p 2.36%
AJ Bell (AJB) 442.00p 2.33%
Ocado Group (OCDO) 202.90p 1.90%
Playtech (PTEC) 353.00p 1.72%
Harbour Energy (HBR) 272.60p 0.96%
IG Group Holdings (IGG) 1,332.00p 0.60%
FTSE 250 - Fallers
Inchcape (INCH) 804.00p -7.47%
Morgan Advanced Materials (MGAM) 217.50p -7.07%
Abrdn (ABDN) 208.40p -5.76%
IP Group (IPO) 50.30p -5.59%
Raspberry PI Holdings (RPI) 356.00p -5.04%
Johnson Service Group (JSG) 135.60p -5.00%
Shaftesbury Capital (SHC) 147.60p -4.14%
TBC Bank Group (TBCG) 4,560.00p -3.70%
JPMorgan Japanese Inv Trust (JFJ) 786.00p -3.65%
Templeton Emerging Markets Inv Trust (TEM) 270.50p -3.55%
279.13 (2.59%)
80.65
0.00