9th Mar 2026 09:32
(Alliance News) - Stock prices in London opened sharply lower on Monday, as war in Iran triggered the biggest single-day spike in oil prices in six years and sent global markets into retreat.
The FTSE 100 index opened down 172.77 points, 1.7%, at 10,111.98. The FTSE 250 was down 527.67 points, 2.3%, at 21,974.47, and the AIM all-share was down 17.00 points, 2.2%, at 767.70.
The Cboe UK 100 was down 1.6% at 1,006.74, the Cboe UK 250 was down 2.7% at 19,335.53, and the Cboe small companies was down 0.2% at 17,982.03.
Oil prices surged after Iran launched retaliatory strikes against crude-producing Gulf nations, pushing Brent and West Texas Intermediate to peaks just below USD120 a barrel after jumping around 30%. European gas prices also climbed roughly 30% amid fears of supply disruption. Since the start of the conflict on February 28, WTI has risen more than 75% while Brent is up over 60%.
Brent oil was quoted at USD106.71 a barrel early in London on Monday from USD90.85 late Friday.
London's oil majors Shell and BP were supported by the spike, up 2.0% and 1.0% respectively at the top of the FTSE 100 and among the few stocks in positive territory.
The rally in crude later eased after the Financial Times reported that G7 finance ministers would discuss a coordinated release of emergency reserves with the International Energy Agency.
A French government source confirmed that releasing strategic oil reserves to stabilise energy markets rocked by the Middle East crisis would be among the options discussed at Monday's G7 finance ministers' meeting at 1230 GMT.
Despite the surge, oil prices remain below levels seen in 2022 at the outbreak of the war in Ukraine.
US President Donald Trump sought to play down the turmoil, insisting prices will "drop rapidly when the destruction of the Iran nuclear threat is over" and were a "very small price to pay". "ONLY FOOLS WOULD THINK DIFFERENTLY," he asserted in a post on his Truth Social platform.
After Iran's supreme leader was killed in an Israeli strike at the start of the war, his son Mojtaba Khamenei was named successor on Sunday, a move likely to anger Trump, who has previously called him an "unacceptable" choice.
Against this backdrop, traders ramped up rate expectations. Markets are now pricing in a rate hike from the Bank of England and see two increases from the European Central Bank this year, sending bond markets lower as rising energy costs feed inflation concerns. Both the UK and Europe are seen as vulnerable to fresh energy shocks.
In Europe, the sell-off was even more pronounced. The CAC 40 in Paris fell 2.6%, while the DAX 40 in Frankfurt dropped 2.5%.
Sentiment in Germany was further dented by data showing industrial production declined 0.5% in January from December, against expectations of a 0.9% rise. On a calendar-adjusted basis, output was down 1.2% on-year. December's figure was revised to a 1.0% monthly fall, less severe than initially reported.
The pound was quoted at USD1.3317 early Monday in London, lower compared to USD1.3387 at Friday's close. The euro stood at USD1.1534, lower against USD1.1597. Against the yen, the dollar traded at JPY158.58, up from JPY157.62.
Asian markets mirrored the global rout. The Nikkei 225 in Tokyo ended down 5.2%. The Shanghai Composite fell 0.7%, the Hang Seng dropped 1.4%, and the S&P/ASX 200 in Sydney closed 2.9% lower.
In the US on Friday, Wall Street ended deep in the red, with the Dow Jones Industrial Average down 1.0%, the S&P 500 down 1.3% and the Nasdaq Composite down 1.6%.
The yield on the US 10-year Treasury was quoted at 4.19%, widening from 4.16%. The yield on the US 30-year Treasury was quoted at 4.80%, widening from 4.78%.
Back in London, the sell-off was broad-based, hitting airlines and financial stocks. Miners Antofagasta and Anglo American were the two the worst performers in the blue-chip index, down 5.7% and 5.6% respectively after both received broker rating cuts from JPMorgan.
On the FTSE 250, airline Wizz Air was the biggest faller, down 8.6%, hit by the double whammy of surging fuel costs and travel disruption following airspace closures in parts of the Middle East. The stock also faced mixed broker updates, with Bernstein cutting its price target to 2,500 pence from 3,000p, while Barclays raised its target to 1,200p from 1,150p.
Shipping services provider Clarkson was a rare bright spot, up 1.8%. Although it reported lower revenue and profit for 2025, it lifted its dividend and said it has a "solid" foundation for 2026 despite macroeconomic uncertainty.
The company noted that conflict in the Middle East, including attacks on vessels transiting the Red Sea and Straits of Hormuz, has disrupted global shipping patterns.
Many vessels have diverted around the Cape of Good Hope rather than pass through the Suez Canal, extending journey times and increasing vessel demand, supporting freight markets.
Among smaller caps, M&C Saatchi rose 3.4% after AdvancedAdvT, down 2.5%, said it does not intend to make a takeover offer following previously rejected approaches.
AdvancedAdvT's Chair Vin Murria was appointed non-executive deputy chair of M&C Saatchi and is deemed to be acting in concert under takeover rules.
Separately, M&C Saatchi said Chief Executive Zaid Al-Qassab will step down on March 31 by mutual agreement, with Heather Rabbatts becoming interim executive chair, and launched a share buyback of up to GBP4.5 million.
CQS Natural Resources Growth & Income fell 7.4% after announcing the resignation of portfolio managers Keith Watson and Rob Crayfourd. Golden Prospect Precious Metals and Geiger Counter, who also announced the resignation of the same portfolio managers, were down 8.0% and 8.9% respectively.
Gold was quoted at USD5,099.00 an ounce, lower against USD5,142.35 on Friday.
Still to come on Monday's economic calendar are US consumer inflation expectations.
By Eva Castanedo, Alliance News reporter
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