FTSE 100 Down 1% on Iran Strikes; Defence Stocks Lead, BT Slumps on Mittal Report
The FTSE 100 traded down 1% at 10,395.98 by midday on Thursday and held the losses through the afternoon as the Iran-US strike exchange ended the framework-deal optimism. Brent crude rose 2.2% to $96.40 a barrel. Defence firms BAE Systems, Babcock and Melrose were among the top performers as the geopolitical risk premium returned. BT Group slumped following a report the UK government would oppose any attempt from Indian billionaire Sunil Bharti Mittal to increase his stake. Johnson Matthey fell on its acquisition of Cormetech for $360 million. Sterling traded at $1.3410.
PPHE Hotel surged after receiving a £22 per share takeover proposal from Israel’s Fattal Hotel Group. Computacenter gained after acquiring Government Acquisitions for up to $92 million. The losses were exacerbated by ex-dividend trading in Kingfisher, National Grid, Severn Trent, AB Foods, Hilton Foods and Breedon. Russ Mould, AJ Bell investment director: “For now, oil prices remain out of the $100 per barrel danger zone but government bond yields are ticking higher and the FTSE 100 and other European markets followed Asian shares in chalking up material losses.” The UK 10-year gilt yield is likely to give back some of the 34-basis-point rally off the 13 May peak as imported-inflation expectations re-anchor higher.