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Highlights
FTSE 100 and pound slide following military action in the Middle East
Airline stocks including LON:IAG and LON:EZJ experience marked declines
Defence and oil firms such as LON:BA. and LON:BP. gain amid rising tensions
The FTSE 100 opened lower after fresh geopolitical instability following reported military strikes by Israel on Iranian nuclear sites. Within early trading hours, the airline sector showed notable. Shares of International Consolidated Airlines Group S.A. (LON:IAG), the parent company of British Airways, and EasyJet PLC (LON:EZJ) moved downward, influenced both by the regional tensions and a recent Air India aircraft crash.
The news weighed heavily on sentiment across aviation-linked stocks. Investor reaction reflected broad concerns around international travel disruption and heightened operational risk in global airspace corridors.
Energy Shares Advance as Oil Prices Surge
Amid the broader index decline, the oil sector saw positive traction. BP PLC (LON:BP) and Shell PLC (LON:SHEL) rose early in the session following a strong upward move in global crude oil prices. The escalation in the Middle East raised concerns about oil supply continuity, especially given Iran's significance within the global energy landscape.
Aerospace and defence companies also gained ground. BAE Systems PLC (LON:BA.) led advances within the FTSE 100, reflecting heightened demand for defence assets amid ongoing regional instability.
Broader Market Indexes Reflect Geopolitical Jitters
The FTSE 250 also registered a decline, weighed down by mid-cap firms with exposure to the conflict-affected region. Energean PLC (LON:ENOG), focused on offshore gas operations near Israel, experienced a notable retreat in its share price.
The FTSE 350 tracked the overall downward momentum seen across London's major benchmarks, with sectors tied to tourism, energy supply, and security leading in volatility.
Meanwhile, the sterling dropped in early trading against the dollar. This follows a strong session previously, where both the FTSE 100 and sterling had reached record levels before pulling back in the latest session.
Safe-Haven Assets React
Gold moved higher in Asian markets, with traders seeking stability amid the intensifying crisis. The metal's rise echoed concerns over prolonged instability, with safe-haven flows affecting multiple asset classes.
Oil benchmarks experienced the sharpest gains recorded in several years, though later sessions showed some retracement. Market observers remain focused on developments involving Iranian nuclear policy and any further military activity that may alter energy trade flows globally.
Kathleen Brooks, a market research executive, noted that the complexity of the conflict is adding uncertainty to global markets. Market participants are expected to continue monitoring international diplomatic developments and regional military responses in real time.
For companies within the defence and energy sectors listed on the FTSE Dividend Stocks list, shifts in share value may also reflect movement in commodity-linked revenues and geopolitical sensitivities.
