FTSE 100 slides as gas prices rocket and oil surges after conflict erupts with Iran
FTSE100 Markets fell this morning and gas and oil prices rose following conflicts with Iran in the Middle East.
After the FTSE hit record highs last week, Britain’s leading stock index fell 147.2 points, or 1.35 percent, to 10,763 at 13:30.
Oil prices rose on fears of disruption in energy markets after Iran warned tankers in the Strait of Hormuz that no ships would be allowed through. Brent Crude Oil rose 8.6 percent to $79.37 at lunch.
Gas prices have also soared, with the EU natural gas measure rising by almost 40 percent since Friday after Qatar halted production of liquefied natural gas (LNG) following Iran’s drone strikes.
Neil Wilson of Saxo Markets said: ‘We are a long way from 2022 in terms of pricing but we could see chaos if LNG is effectively shut down to Europe via Hormuz for an extended period. ‘I’m more worried about European natural gas prices than oil prices.’
Gold rose 2.2 percent to $5,393 as investors sought safe-haven assets and feared a new wave of gains. inflation due to the impact of high oil prices.
Footsie’s decline was offset by energy, commodity and defensive stocks. But nervous investors will be watching markets closely today for fear the conflict could send shares falling.
While investors were watching the opening of the US market, German Dax was traded with a loss of 2.7 percent and French CAC was traded with a loss of 2.2 percent.
Gas prices in Europe have increased by almost 40% since Friday
Iran’s wave of retaliatory attacks against Middle Eastern countries continued yesterday after the US and Israel struck targets across Iran on Sunday following the killing of Supreme Leader Ayatollah Ali Khamenei.
The FTSE 100’s relatively quiet decline came as the index strengthened due to its significant weighting in energy companies, miners and defence.
These were supported by higher oil prices, rising gold demand and expectations that the increase in defense spending would continue.
Stocks rising on the FTSE 100 this morning included BAE, up 5.3 percent, Shell, up 2.6 percent, and BP, up 2.6 percent.
Barclays lost 5.8 percent, BA owner IAG lost 5.4 percent, HSBC lost 5 percent and easyJet lost 3.6 percent. Intercontinental Hotels also fell 4.5 percent.
Gas prices jumped after Qatar’s state energy company stopped producing liquefied natural gas.
The following statements were made in the statement: ‘Due to military attacks on QatarEnergy’s operating facilities in Ras Laffan Industrial City and Mesaieed Industrial City in the State of Qatar, QatarEnergy has stopped the production of liquefied natural gas (LNG) and related products.’
European gas prices remain well below levels seen during the 2022 energy crisis but have risen above early January levels, which are typically high due to cold winter weather.
A prolonged increase could trigger a new era of energy bill inflation; This will worry central bankers and they may stop the cuts. interest rates.
U.S. gas prices have been less exposed to global turmoil due to domestic production and are up around 5 percent today.
FTSE 100’s biggest risers on Monday, March 2 at 13.30
FTSE 100’s biggest falls at 13.30 on Monday, March 2
Richard Hunter, head of markets at Interactive Investor, said: ‘The weekend’s bad developments have unsurprisingly had a debilitating effect on many asset classes; The most important of these was uncertainty regarding the escalation and duration of the conflict.
‘At the center of the storm was the potential inflationary rise in the price of oil at a time when central banks still hoped further price rises could be contained.
‘Although oil, defense and mining shares provided strong support, the FTSE 100 was hit by a stronger wave of investor pessimism.’
The FTSE 100 was flying high before the turmoil, hitting a series of record highs and knocking on the door of 11,000 points.
FTSE 100 was flying high before conflict with Iran
Susannah Streeter, chief investment strategist at broker Wealth Club, said: ‘Investors are seeking refuge in safe havens as conflict widens in the Middle East.
‘Precious metal prices have risen again as gold and silver become increasingly sought after in these turbulent times.
‘Gold hit a one-month high after recording its seventh consecutive monthly rise in February – its best streak since 1973. At the time, a severe oil shock led to a flight to safe havens.
‘Although oil prices have risen sharply, this does not yet reflect the rise of the 1970s, when prices effectively quadrupled in just a few months after Gulf countries retaliated against US support for Israel in the Yom Kippur War.
‘However, with tensions rising and uncertainty so high, it is not yet clear how the current conflict will develop and prices may rise even further.
‘This time, other concerns, including high debt levels, concerns about the independence of the Federal Reserve and questions about the sustainability of the AI boom, are also colliding to push precious metal prices higher.’
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