London open: FTSE slumps on Iran conflict but fares better than peers

(Sharecast News) - London stocks slumped in early trade on Monday, with travel and banking names under the cosh following the US and Israel's strikes on Iran over the weekend, although losses were less pronounced than in other markets.

At 0835 GMT, the FTSE 100 was down 0.8% at 10,821.19, while Brent crude was up 10.1% at $81.23 a barrel and gold futures on Comex were up 3.4% at $5,425.80 an ounce.

Despite the heavy losses, the top-flight index outperformed European peers thanks to strength in the energy and defence sectors. The benchmark Stoxx 600 index was down a more pronounced 1.7%, with Germany's Dax 2.2% lower and France's CAC 40 off 2%.

Kathleen Brooks, research director at XTB, said the FTSE 100 is expected to be an outperformer as the proliferation of defence names and oil majors help to prop up the index.

Indeed, in a research note out earlier, Citi upgraded its stance on UK equities to 'overweight' from 'underweight' as it considered the impact of the weekend's events. It pointed out that the UK market is tilted heavily towards commodities and defensive sectors along with a sizeable share of aerospace & defence, and thus serves as an effective "geopolitical hedge" within equity portfolios.

Richard Hunter, head of markets at Interactive Investor, said: "The sinister developments over the weekend have unsurprisingly had a debilitating effect on many asset classes, not least of which is uncertainty around the escalation and duration of the conflict.

"At the eye of the storm was the potentially inflationary spike of the oil price at a time when central banks are still hoping that any further price rises could be contained. The oil price jumped by almost 9% overnight, despite the announcement that OPEC would be increasing production, although attacks on ships in the Strait of Hormuz have kept tensions high.

"The gold price inevitably resumed its onward march to fresh record levels as a haven for investors, while more broadly Asian markets and indeed Dow futures were weaker as news of the situation continues to develop."

On home shores, the latest survey from Nationwide showed that house price growth held steady in February.

House prices were up 0.3% on the month and 1% on the year, unchanged on January. The average price of a home stood at �273,176 last month, versus �270,873 in January.

Robert Gardner, Nationwide's chief economist, said: "This reinforces the view of a modest recovery after a dip at the end of 2025, most likely reflecting uncertainty around potential property tax changes ahead of the Budget. Nevertheless, the number of mortgages approved for house purchase remain close to the levels prevailing before the pandemic."

Gardner said "housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained as expected".

Unsurprisingly, travel and bank stocks took the biggest hit in equity markets. BA and Iberia owner down IAG was the worst performer on the FTSE 100, followed by events organiser Informa, InterContinental Hotels, easyJet, Barclays, HSBC and Standard Chartered.

IHG was also in focus after the Competition and Markets Authority said it was among four hotel companies being investigated over suspected sharing of sensitive information.

PPHE Hotel Group also suffered heavy losses, despite announcing an agreement to repurchase the freehold interest in Park Plaza London Waterloo.

Wizz Air, Carnival and SSP were also among the biggest fallers on the FTSE 250.

Going the other way, defence firm BAE Systems shot higher, along with Babcock, Qinetiq and Chemring amid rising geopolitical tensions.

Meanwhile, oil giants BP and Shell gushed higher as oil prices surged.

Precious metals miner Fresnillo shone as gold prices jumped, along with gold miners Endeavour and Hochschild.

In equity news, Bunzl's full-year revenue and operating profit met expectations, while Smith & Nephew posted a jump in annual revenues and profits as new products helped bolster demand.

Elsewhere, engineer Senior said it was on track to meet medium-term financial targets as it posted a rise in full-year profit and revenue, as the performance of its aerospace division improved.

Energean said the Israeli government had ordered it to suspend production at its floating gas production, storage and offloading facility near the country's coast in response to the war with Iran which began on Saturday.

Market Movers

FTSE 100 (UKX) 10,821.19 -0.82%

FTSE 250 (MCX) 23,355.49 -1.69%

techMARK (TASX) 6,060.44 0.18%

FTSE 100 - Risers

BAE Systems (BA.) 2,274.00p 7.62%

BP (BP.) 500.10p 5.35%

Shell (SHEL) 3,242.00p 5.27%

Fresnillo (FRES) 4,310.00p 2.88%

Babcock International Group (BAB) 1,383.00p 2.81%

SSE (SSE) 2,715.00p 1.67%

Glencore (GLEN) 540.00p 1.44%

National Grid (NG.) 1,411.50p 1.44%

Rio Tinto (RIO) 7,375.00p 1.13%

Bunzl (BNZL) 2,210.00p 0.91%

FTSE 100 - Fallers

Informa (INF) 745.00p -8.90%

International Consolidated Airlines Group SA (CDI) (IAG) 394.50p -6.82%

InterContinental Hotels Group (IHG) 130.35p -4.87%

Barclays (BARC) 430.70p -4.68%

HSBC Holdings (HSBA) 1,331.80p -4.49%

easyJet (EZJ) 446.40p -4.33%

Standard Chartered (STAN) 1,747.00p -4.20%

JD Sports Fashion (JD.) 78.84p -3.71%

Croda International (CRDA) 2,948.00p -3.43%

Burberry Group (BRBY) 1,115.50p -3.27%

FTSE 250 - Risers

Ithaca Energy (ITH) 240.25p 7.66%

Endeavour Mining (EDV) 5,500.00p 5.48%

Harbour Energy (HBR) 270.80p 5.13%

Pan African Resources (PAF) 186.40p 4.13%

Chemring Group (CHG) 554.00p 3.93%

Hochschild Mining (HOC) 835.00p 3.77%

QinetiQ Group (QQ.) 525.50p 2.28%

Shawbrook Group (SHAW) 403.25p 2.03%

Clarkson (CKN) 4,315.00p 2.00%

Diversified Energy Company (DI) (DEC) 1,060.00p 1.93%

FTSE 250 - Fallers

Oxford Nanopore Technologies (ONT) 119.00p -10.59%

PPHE Hotel Group Ltd (PPH) 1,802.00p -9.90%

Carnival (CCL) 2,161.00p -7.36%

RHI Magnesita N.V. (DI) (RHIM) 3,035.00p -6.73%

SSP Group (SSPG) 189.20p -6.57%

Energean (ENOG) 866.50p -5.66%

WH Smith (SMWH) 643.50p -5.60%

Wizz Air Holdings (WIZZ) 1,137.00p -5.33%

International Workplace Group (IWG) 212.60p -4.94%

AO World (AO.) 94.60p -4.15%