Source: Sharecast
The Footsie fell for a second straight day, completely erasing the past two weeks' rally that sent it a record high on Friday (10,910.55), dropping 296 points (-2.75%) to settle at 10,484.13 – its lowest finish since 16 February.
Just seven of the index's 100 constituents finished in positive territory – including BP as oil prices jumped and Babcock as defence contractor stocks gained in response to the conflict – while mining stocks tanked.
Over in Europe, major benchmark indices fell between 3% and 4.5%, while Wall Street's three main indices all opened around 1.5% lower.
All eyes remained firmly on developments in the Middle East, as Israel launched new strikes on Beirut and Tehran, with Israeli defence minister Israel Katz authorising the IDF to advance and take control of "additional strategic positions" in Lebanon.
Meanwhile, US President Donald Trump said during a Medal of Honor ceremony at the White House that he will do "whatever it takes" in Iran and that the conflict could last a month or longer.
"We’re already substantially ahead of our time projections. But whatever the time is, it’s OK," he said. "Right from the beginning, we projected four to five weeks, but we have capability to go far longer than that."
Axel Rudolph, chief technical analyst at IG, said the rising conflict was worsening the global economic outlook. "Monday's relatively muted reaction to the Middle East conflict across US equity markets gave way to sharp selling on Tuesday as the situation escalated," he said.
"In the UK yields jumped as markets scaled back on Bank of England rate cut expectations for March," he added. The yield on a 10-year UK Gilt jumped 12.6 basis points to a three-week high of 4.436%.
In other markets, Brent crude surged again after a significant jump on Monday, this time rising 5.7% to a 20-month high of $82.18 a barrel, while European natural gas futures rocketed nearly 40% to top €60/MWh, a level not seen since 2023, as the conflict disrupted production.
Intertek sinks, miners provide a drag
Testing and inspection specialist Intertek tumbled 18% after annual results revealed a deceleration in organic growth in November and December, and higher-than-expected restructuring costs. RBC Capital Markets said there was "too much for the bears to get their teeth stuck into".
BA and Iberia owner IAG and budget airline easyJet flew lower as the Middle East conflict disrupted travel and sparked a jump in oil prices. Heavily-weighted miners lost ground as copper prices fell, with Antofagasta, Anglo American and Glencore all down.
Precious metals miner Fresnillo lost its shine as gold prices fell, with investors taking profits on the yellow metal despite the escalation in the Middle East.
Banks remained under pressure, with HSBC, Barclays and NatWest all weaker.
On the FTSE 250, Keller Group shot higher as the geotechnical specialist contractor hailed a record full-year performance, ahead of expectations, hiked its dividend and announced a further £100m share buyback.
Specialist manufacturer Morgan Advanced Materials slumped after posting lower full‑year profits and margins as weaker demand weighed on revenue.
