UK stock indexes fell on Monday amid a global selloff due to rising oil prices linked to escalating military conflict in the Middle East. Oil prices surged nearly 8% after Iranian retaliatory attacks disrupted shipping in the Strait of Hormuz following the bombing that killed Iranian leader Ayatollah Ali Khamenei. While British oil companies like Shell rose, banks and travel firms faced heavy selling, reacting to potential travel and economic disruptions.
The FTSE 100 index dropped 1% and the FTSE 250 fell 1.3%. Concerns over new inflationary pressures could decrease expectations for interest rate cuts, noted Dan Coatsworth from AJ Bell. Major banks like HSBC, Barclays, and Lloyds fell between 2.7% and 4.7%. British government bond yields rose as rate cut expectations decreased to 74%. British Airways operator IAG fell 5.8% after canceling flights, contributing to a 4.6% decline in the travel and leisure index. Senior shares fell 3.7% despite strong results.
With information from Reuters
