Despite a fall in global stock markets and a spike in oil prices caused by Iran’s missile attack on Israel, the FTSE 100 index, which is heavily weighted toward energy and defence companies, outperformed its peers in London.
The blue-chip FTSE 100 index increased by 0.17%, while the midcap FTSE 250 index decreased by 0.63%. The midcap index is more focused on domestic companies.
Stock markets around the world fell, while oil prices, which had lost ground earlier, recovered and surged. Oil prices rose on worries over tensions in the Middle East, leading energy shares to propel the UK’s benchmark FTSE 100 stock index higher on Wednesday.
The defensive nature of the FTSE 100, aided by strength in energy stocks and a surge in oil prices, has headed the index higher in early trade.
In the wake of Iran’s missile attack on Israel, which threatens to intensify the crisis in the Middle East, investors worldwide are assessing the dangers posed to energy supply.
Following yesterday’s salvo of at least 180 missiles fired into Israeli cities in the centre and south of the country by Tehran, the Israeli prime minister has pledged retaliation.
Heavyweight oil and gas shares rose 1.6%, closing at their highest level in almost a week, as a result of fears that Iran’s biggest military strike against Israel could have an impact on Middle Eastern petroleum output.
Oil price increases (BZ=F) helped propel many companies to new highs, including BP (BP.L) and Shell (SHEL.L), which rose about 1.4% and were among the top gainers on London’s FTSE 100 index.
In the first trading session, French oil supermajor TotalEnergies (TTE.PA) increased by 2.24% and Italian firm Eni (ENI.MI) by 1.64%. The news also helped boost defence stock prices.
As investors processed developments in the Middle East and a widely watched survey revealed that factory activity continued to decrease in September, US stocks fell at the close of trading on Tuesday.
US Stocks Slip Amid Middle East Tensions Despite Strong Job Growth in September
The US stocks slumped as continuing tensions in the Middle East overshadowed reports that US firms added more employment than anticipated.
The most recent numbers available from the employment agency ADP show that hiring in the private sector increased by 143,000 jobs in September, which is higher than anticipated. It exceeded the expert prediction of 125,000.
After a five-month slump, job growth resumed in most industries, with manufacturing hiring again after a hiatus since April. This is in contrast to August, when 99,000 new jobs were reported, as per the ADP.
To gauge the rate of employment growth in the US economy, the carefully watched non-farm payroll statistics are released after the ADP figures.
When deciding whether to lower interest rates, the Federal Reserve takes non-farms into account as part of its monetary policy decisions.
At the market close, the blue-chip Dow Jones Industrial Average was down 0.4% and the S&P 500 index was down 0.9%. However, as of writing, the Dow Jones Industrial Average is up for 0.094% and the S&P 500 index is up 0.014%.
Elsewhere, in Europe, at the time of writing, the Stoxx 600 index in Europe declined 0.27% and the Dax in Germany, which tracks 40 blue-chip companies, fell 0.25%.
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