Key facts
- The US has retaliated against Iran following an attempted surprise attack on its forces in the Middle East.
- The US, in conjunction with Saudi Arabia, conducted strikes against Iran-backed militias in Iraq.
- This escalation marks an end to a recent pause in conflict between the US and Iran.
- The FTSE 100 index is anticipated to decline as a result of the renewed geopolitical tensions.
- Earlier in the week, oil prices had fallen as a result of a temporary de-escalation in conflict.
The UK's FTSE 100 index is poised for a decline as global markets react to renewed geopolitical tensions between the US and Iran. Overnight, the US, in coordination with Saudi Arabia, launched strikes against Iran-backed militias in Iraq, citing an "attempted surprise attack" on its forces in the Middle East. This action signals an end to a recent pause in conflict that had previously led to a drop in oil prices and a gain for the FTSE 100 on Tuesday.
Earlier in the week, Brent crude, the international benchmark, fell by 4.8 per cent to $84.09 per barrel, building on earlier gains. The US stock market also saw a downturn, with the Nasdaq falling as the sell-off in tech stocks persisted. This tech rout had earlier impacted South Korea's Kospi and Japan's Nikkei. Danni Hewson, head of financial analysis at AJ Bell, noted that London's FTSE 100, with fewer big tech constituents, had benefited from this dynamic earlier in the week, citing positive updates from companies like Unilever and SSP. Several UK-listed firms, including Rathbones, Greggs, Standard Chartered, and Reckitt, are scheduled to release trading updates today.