Market update: FTSE 250 slumps 1.1% as oil stocks support top flight
10:01 , Graeme EvansOil and defensive stocks today limited the downside for the FTSE 100 index amid a risk averse session for global markets in the wake of Israel’s attack on Iran.
The price of Brent Crude jumped 10% overnight before settling near $73.75 a barrel, still an increase of 6% at the highest level in three months.
Higher jet fuel costs and geopolitical risk meant British Airways and Iberia owner IAG led the FTSE 100 fallers board, down 4% or 12.4p to 316.4p.
Low-cost carrier easyJet fell 20.2p to 538.6p, while FTSE 250-listed Wizz Air reversed 36.1p to 1148.9p. Holiday Inn hotels group IHG lost 3% or 236p to 8160p, while business events organiser Informa dropped 22.4p 768.2p.
The FTSE 100 index fell 0.4% or 39.65 points to 8845.27, having set an all-time high close of 8884.92 in yesterday’s session.
London’s decline compared with falls of 1.2% in Frankfurt and 0.8% in Paris, while the Nikkei 225 in Tokyo finished down 0.9% and the Hang Seng index lost 0.6%.
The resilience of the FTSE 100 reflected the contribution of oil majors BP and Shell after their shares rallied 10.2p to 390.9p and 42.5p to 2657p respectively.
BAE Systems led the risers board with an improvement of 3% or 63p to 1948p, keeping the defence giant near to a record high.
A 1% rise in the safe haven asset of gold to $3420 an ounce also helped Endeavour Mining put on another 50p to 2382p and Fresnillo to lift 13p to 1427p.
A flight to defensive stocks benefited Imperial Brands, which rose 13p to 2905p, and renewable energy firm SSE following a gain of 8.5p to 1825p.
The reaction to overnight events was more severe in the FTSE 250 index, which fell by 1.1% or 239.2 points to 21,147.49.
Cruise ship operator Carnival and the airport catering firm SSP both fell 4%, Aston Martin Lagonda dipped 3.5p to 83p and Burberry fell 3% or 38.5p to 1085p.
On AIM, Renold shares jumped 11% or 8.2p to 84.2p after the industrial chains business became the latest company to back a private equity takeover.
It recommended a £186.7 million approach by MPE, which at 82p a share valued the business at a 96% premium to Renold’s three-month average share price prior to the start of an offer period in mid-May.
IAG down 5% as FTSE 100 falls 0.6%, BAE Systems up 3%
08:40 , Graeme EvansAirline stocks are top of the FTSE 100 fallers board, led by British Airways and Iberia owner IAG after a decline of 5% or 15.3p to 313.5p.
Higher jet fuel costs and geopolitical risk also meant easyJet fell 20.2p to 538.6p, while FTSE 250-listed Wizz Air reversed 65p to 1120p. Holiday Inn hotels group IHG lost 3% or 292p to 8104p.
Banking stocks are also under pressure as Barclays fell 2% or 7.65p to 316.3p and NatWest dipped 10.6p to 506.6p.
BAE Systems rose 3% or 60p to 1945p while BP and Shell lifted 2% to leave the FTSE 100 index 0.6% or 49.84 points lower at 8835.08.
Renold backs £187m takeover as dealmaking continues
08:29 , Graeme EvansAIM-listed industrial chains business Renold today agreed to back a £186.7 million takeover by private equity firm MPE.
The latest swoop for a London-listed firm was pitched at 82p a share, a 96% premium to Renold’s three-month average price prior to the start of an offer period in mid-May.
MPE said the addition of Renold will enable its Ohio-based portfolio company Webster to serve a broader range of industrial automation, material handling and power transmission needs across multiple sectors.
Renold has manufacturing facilities in Europe, North America and Asia, generating revenue of £241.4 million and adjusted operating profit of £29.7 million in 2023/24.
Earlier this week, Peel Hunt said there had been 30 bids for UK companies with a market capitalisation of more than £100 million so far this year.
FTSE 100 down 0.7%, pound lower versus dollar
08:10 , Graeme EvansThe FTSE 100 index has opened 0.7% or 60.29 points lower at 8824.63 while the FTSE 250 index is down by 0.8% or 180.40 points to 21,248.14.
BP and Shell shares are up by about 3% after the price of Brent Crude rose to near $73 a barrel.
A retreat to safe haven assets left the pound 0.5% lower versus the US dollar at $1.354, having yesterday traded at its highest level since 2021.
Oil set for biggest weekly rise in three years
07:44 , Graeme EvansBrent Crude is on course to register its largest weekly rise since February 2022 after Israel’s attack on Iran’s nuclear facilities lifted the price to $74 a barrel.
The benchmark, which is up 7% today, started the week near to $66 a barrel.
Hargreaves Lansdown analyst Derren Nathan said: “It’s not just the outlook for Iranian exports that’s a concern but also the potential for disruption to shipping in the Persian Gulf’s Strait of Hormuz, a key route for about 20% of global oil flows and an even higher proportion of liquified natural gas haulage.
“A 3.6-million-barrel draw on US inventories last week, the third consecutive weekly decline, is also providing support for prices on the demand side.”
FTSE 100 seen lower as Asia markets fall 1%, oil surges
07:04 , Graeme EvansOil prices are up more than 7% and stock markets look set to open sharply lower after Israel attacked nuclear facilities in Iran.
Fears of supply disruption in the Middle East sent Brent Crude as high as $78 a barrel before settling near $74.32, the highest level since early April. Gold rose 1% to $3423 an ounce.
The escalation of geopolitical tensions means Wall Street futures are currently pointing to a fall of about 1.5% for leading US benchmarks.
The FTSE 100 index, which yesterday set a record close of 8884.92, is seen down by 0.5%. In Asia, the Nikkei 225 and Hang Seng index have fallen by about 1%.
