Stock markets plunged in afternoon trade after oil prices rose amid rising tensions in the Middle East.
Brent Crude was trading 3.6% higher at $84.36 at the close of London’s equity market. After opening higher, the FTSE 100 turned negative and closed 153.71 points (1.45%) lower at 10,413.94.
In the US, the Dow Jones Industrial Average was down 1.6%, the S&P 500 index was 0.8% lower while the Nasdaq Composite dropped 0.6%. The pound was lower at $1.3309, down from $1.3365.
Sir Keir Starmer announced that four Typhoon fighter jets were being sent to Qatar and France, Spain, Greece, Italy and the Netherlands are sending naval assets to the Mediterranean. He stood by his earlier decision not to get involved in attacks on Iran.
The EU’s foreign policy chief Kaja Kallas expressed concern about the escalation of the conflict and the potential for civil war within Iran. BP announced it is withdrawing staff from Iraq, where it has just signed a major deal.
AJ Bell head of financial analysis Danni Hewson, said: “The optimism which helped lift Asian and European markets early in the day evaporated like water droplets on a smouldering stove top.
“It’s becoming harder to see a quick resolution to the conflict in the Middle East and that in turn is forcing markets to look again at their interest rate expectations for the coming months.”
Even defensive stocks were not immune to today’s sell-off. Superstar stock Rolls-Royce fell 73p (-5.36%) to 1290p. Also lower were mining stocks as a reduction in risk appetite hammered stocks in the sector, with Fresnillo, Antofagasta, Rio Tinto and Anglo American all in the red.
Homebuilders were also hit. Taylor Wimpey has adopted a cautious outlook in view of current events that may impact demand. Full story here.
Among the best performers were Rentokil, which rose after reaffirming guidance, and Entain which advanced as the Ladbrokes owner said full-year underlying EBITDA was ahead of expectations.
Harbour Energy reported record production for the year ended 31 December, an 84% increase from 2024, but its £2.1bn profits were wiped out by £2.2bn tax bill, pushing it to a £136m loss.
The company generated $1.1 billion in free cash flow, a significant improvement from $0.1 billion in the prior year. Shares rose 24.8p (9.52%) to 285.4p.
The company’s production in the UK has declined to less than a third from over 80% around three years ago, Harbour CEO Linda Cook said.
Insurer Aviva fell 21.8p (-3.27%) to 645.6p despite posting a 25% jump in full-year operating profit supported by a strong performance in its UK & Ireland and Canadian operations. Full story here.
ITV posted full-year results ahead of market expectations, with revenue up 1% to £3.5 billion, driven by 5% growth in ITV Studios’ which, along with media & entertainment, accounts for two-thirds of revenue.
A 10% growth in digital revenues offset a decline in linear advertising. Group adjusted EBITA decreased by 1% to £534 million.
The company achieved £63 million in permanent non-content cost savings and is continuing discussions with Sky regarding a possible sale of the M&E business.
The company is proposing a 5p per share dividend. The shares were flat, up just 0.85p (+1.09%) at 78.5p.
Carolyn McCall, ITV chief executive, said: “ITV delivered a good performance in 2025, ahead of current market expectations and against a challenging market backdrop. With a strong digital platform, we have successfully capitalised on growth opportunities, delivered resilient profits and generated good levels of cash.”
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