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The FTSE 100 index fell on Friday but avoided heavier losses as oil prices surged following the U.S. killing of top Iranian general Qasem Soleimani.
Global stocks dropped as the U.S. airstrike on Baghdad’s airport on Thursday night stoked geopolitical fears of conflict in the Middle East and Iranian retaliation.
However, the U.K.’s blue-chip index UKX, -0.30% – home to oil majors BP UK, +0.00% and Shell RDSA, +1.40% , suffered smaller losses than the other major European indexes, falling 0.5%.
Futures for Brent crude BRN00, +3.80% soared 4.1% to $68.95 and West Texas Intermediate crude futures CL00, +3.63% also jumped 4.4%.
The pound GBPUSD, -0.3958% continued its recent weakness, falling 0.6% to $1.3059.
What’s moving the markets?
General Qasem Soleimani, Iran’s most powerful military commander, was killed by a U.S. airstrike in Iraq on Thursday night, sending global markets into a spin. The Pentagon said Soleimani was “actively developing plans to attack American diplomats and service members in Iraq and throughout the region”.The attack reignited geopolitical tensions with Iran’s Supreme Leader Ayatollah Ali Khamenei promising “severe revenge.”
“The FTSE 100 fared better than some of its global peers, reflecting a heavy weighting towards oil stocks BP and Royal Dutch Shell, which benefited from the surge in the price of crude, and continued weakness in the pound which boosts the relative value of constituents’ overseas earnings,” AJ Bell investment director Russ Mould said.
As investors sought safe havens amid mounting risk, gold climbed 1.4% to $1549.
In economic data, U.K. consumer borrowing increased in November at its slowest rate since 2014, according to the Bank of England, while credit card repayments exceeded borrowing for the first time since 2013.
Which stocks are active?
Airline stocks were among the worst affected as oil prices rose sharply. EasyJet EZJ, -3.29% fell 3.6% and Ryanair RY4C, -1.94% dropped 2.3%.
Conversely, oil majors posted solid gains with BP rising 1.8% and Royal Dutch Shell gaining 1.4%.
