FTSE 100 plunges 11% since Iran war started as stock markets continue to tumble
The FTSE 100 entered what is known as correction territory on Monday after another 2 per cent drop on the day caused it to fall more than 10 per cent from recent highs.
A market index or stock that exceeds this point is known as a correction; This can often happen after excessive intake or, in this case, with a sudden change in external events. The ongoing situation surrounding the Middle East war has now entered its fourth week and investors have abandoned global markets due to fears about how long things can be resolved.
London’s main benchmark, the FTSE 100, was within touching distance of 11,000 points at the end of February. The score ticker is a representation of the total weight or performance of the 100 companies in the index. Fast forward to last week, and it fell below 10,000 on Friday for the first time since reaching the milestone level in early January.
It fell 2 percent to 9,710 points in the first two hours of trading this week; this represents an 11 percent decline from its highest point since the first attacks against Iran were launched. The index fell for the first time throughout 2026 after outperforming the US’s main index, the S&P 500, throughout 2025.
A stock, sector or index that has fallen by 20 percent from recent highs is known as a bear market or crash zone.
Elsewhere in Europe, Germany’s Dax fell 1.8 percent and France’s Cac 40 fell 1.4 percent.
This followed heavy declines in Asia overnight as rhetoric from the United States and Iran gave little sign of a resolution to the dispute and Japan’s Nikkei fell more than 3 percent.
Brent crude rose 1 percent to nearly $114 a barrel after Iran warned it would hit power plants in the Middle East if U.S. President Donald Trump follows through on his threat to bomb power plants in the Islamic Republic.
Prime Minister Sir Keir Starmer is chairing an emergency Cobra meeting on Monday following talks with US President Donald Trump on Sunday, agreeing that reopening the Strait of Hormuz shipping route is “essential” for the stability of global energy markets.
Mr Trump set a 48-hour deadline ending just before midnight UK time on Tuesday and warned Iran that the US would attack its power stations unless the country relinquishes control of the Strait of Hormuz.
However, Iran said it would retaliate by hitting power plants in the Middle East if Trump fulfilled his threat.
IG chief analyst Chris Beauchamp said: “Investors who spent the weekend monitoring new attacks in the Middle East are now waiting to see what happens when Trump’s 48-hour period expires tonight.
“But they were in no mood to hang around and kept selling stocks and precious metals.
“Every day the war continues, it does more damage to the global economy and drives inflation higher, and the possibility of recession increases with each passing hour.”
