The FTSE 100 has clocked up its worst week since January amid renewed market jitters over conflict in the Middle East.
Rising geopolitical tensions and fading hopes over early interest rate cuts have been weighing on London’s main markets.
The FTSE suffered an initial sell-off fuelled by concerns over Israel’s overnight attack on Iran in response to Tehran’s drone and missile strikes last week.
By the end of the session it had erased most of those losses – and ended up 0.2 per cent, or 18.8 points, to 7895.85 – but was still down 1.25p over the course of a week that has seen geopolitical tensions build.
London’s leading share index had last suffered a worse week when it fell 2.14 per cent in the week ending January 19.
Rising tension: The FTSE suffered an initial sell-off fuelled by concerns over Israel’s overnight attack on Iran in response to Tehran’s drone and missile strikes last week
Mid-cap investors were also nursing losses as the FTSE 250 was down 0.3 per cent, or 59.37 points, to 19391.3. Commodity prices surged in early trading, with gold rising more than $2,400 per ounce, close to record highs.
Oil prices also climbed, with Brent crude topping $90 early in the session.
But both gold and oil pared their gains later in the day as Iran said the attacks had little impact.
Gold producers fell, with Centamin down 0.5 per cent, or 0.6p, to 127.5p and Fresnillo sliding 1.3 per cent, or 8p, to 602p but oil major BP added 0.5pc, or 2.5p, to 514.9p and rival Shell gained 0.3 per cent, or 9.5p, to 2851p. Randeep Somel, fund manager at M&G Investment Management, told the BBC’s Today programme: ‘It is good to see that this hasn’t escalated any further and that hopefully the disruption to markets is short-lived.’
The price of bitcoin – the world’s largest cryptocurrency – rose nearly 2 per cent to around $65,000 (£52,000) ahead of the digital coin’s so-called ‘halving’ taking place over the weekend.
This is when the reward for mining bitcoin is cut in half and tends to occur every four years.
On Wall Street, Netflix shares fell despite the world’s largest streaming service reporting that 9.33m paying customers joined its platform between January and March, taking the total to almost 270m around the world.
Shares fell nearly 9 per cent.
In London, sluggish retail sales dragged down the industry. Discount retailer B&M slid 1.9 per cent, or 9.6p, to 510.4p, JD Sports, the self-styled ‘King of Trainers’, dropped 2.8 per cent, or 3.35p, to 116.95p and High Street stalwart Marks & Spencer fell 1.8 per cent, or 4.4p, to 2458p.
Elsewhere, broker Peel Hunt said three of Britain’s major banks are undervalued and should bounce back once the economy improves. It expects Barclays, NatWest and Lloyds to hand out nearly £30billion in capital returns over the next three years.
Peel Hunt told clients to buy shares in Barclays and NatWest. Barclays rose 1 per cent, or 1.86p, to 185.84p, NatWest gained 0.5 per cent, or 1.3p, to 276.7p but Lloyds lost 0.2 per cent, or 0.08p, to 50.92p.
Darktrace was on the rise after analysts at Bank of America upgraded its rating on the cybersecurity firm’s stock, which grew 3.9 per cent, or 17.8p, to 476.2p.
