FTSE indexes slide as Middle East tensions lift oil prices

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FTSE slides on oil jump

Highlights

FTSE 100 drops to 10,519.17 and FTSE 250 hits a one-week low as Middle East tensions and oil supply concerns weigh on UK markets.
BP rises 3% and Shell gains 1.8%, outperforming as the energy index benefits from higher crude prices, while precious metals miners fall 3.6% amid a gold price decline.
Jet2 surges 9.9% on positive travel demand updates, while Vistry falls 6.4% after flagging a £30 million first-half pre-tax loss and IG Group climbs 2.5% on Jersey holding company plans.

Market moves and sector divergence

As reported by Reuters, Britain's main stock indexes retreat after U.S. President Donald Trump says an initial agreement to end the war on Iran is over, reviving worries about a wider regional escalation and tighter oil supply. By 1111 GMT, the FTSE 100 falls to 10,519.17 points, its lowest level in nearly one week, while the FTSE 250 touches its weakest level in more than a week.

Most sectors trade in negative territory, with defence shares acting as the biggest drag on the market. The energy index is the only sector in the green, helped by stronger crude prices and investor concern over possible disruptions to Middle East oil flows.

BP rises 3% and Shell gains 1.8%, placing both among the top performers on the blue-chip index. In contrast, precious metals miners drop 3.6% as gold prices fall more than 1% amid renewed inflation concerns and expectations of higher interest rates.

Company updates and UK market backdrop

Separate domestic data offers a more mixed picture for investors, with a survey of recruitment companies showing Britain's jobs market downturn eases slightly last month. The survey points to an increase in temporary hiring and starting salaries, suggesting some resilience in labour demand despite broader market caution.

Among individual stocks, Jet2 jumps 9.9% after the travel company says tourists are more willing to commit to holiday plans following the easing of Middle East tensions. Vistry falls 6.4% after the affordable housing builder warns of a first-half pre-tax loss of 30 million pounds, while IG Group adds 2.5% after proposing a new holding company in Jersey as part of a strategic overhaul aimed at unlocking shareholder value.

In our earlier article on the surge in oil prices after renewed U.S. strikes against Iran, we noted that fears over security in the Strait of Hormuz quickly pushed Brent and WTI higher. We also highlighted how attacks near this key shipping corridor can raise insurance costs and disrupt cargo flows, keeping energy markets sensitive to any escalation.

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