Oil at $100 Sends the FTSE Lower and Rattles Global Markets
London’s FTSE 100 fell 78 points, or 0.7 per cent, to close at 10,639, retreating from a five-month high as oil’s surge above $100 a barrel stoked fears of renewed inflation. The sell-off was sharper on Wall Street, where the S&P 500 dropped 1.2 per cent and the Nasdaq more than 2 per cent, dragged down by heavy falls in Alphabet and Tesla after disappointing earnings. Gold slid around 2 per cent and volatility jumped.
Energy majors Shell and BP rose with the oil price, cushioning the London market, but the broader mood was firmly risk-off as investors repriced the chance of interest-rate rises to contain an oil-driven inflation shock. The Vix “fear gauge” leapt some 16 per cent, and government bond yields rose on both sides of the Atlantic. The pound held around $1.34. For savers and borrowers, the message is that the Gulf war has reached the markets that price mortgages and pensions. Watch whether the sell-off deepens into the Bank of England’s decision next week.