FTSE 100 dodges Iran shock as oil giants ignite a fresh rally

London’s FTSE 100 was little changed on Monday as gains in oil majors helped offset weakness in financial shares, leaving investors to weigh the market impact of renewed US-Iran military exchanges.

The blue-chip index edged up 0.03% to 10,499.88 points by 0927 GMT, while the domestically focused FTSE 250 slipped 0.1%.

The muted move reflected a familiar split in the UK market: energy stocks benefited from higher crude prices, while rate-sensitive and earnings-sensitive pockets of the market remained under pressure.

Oil majors cushion the index

Energy was the main support for the FTSE 100 after oil prices rose more than 3%.

Investors moved into the sector as tensions between Washington and Tehran raised doubts over the durability of last month’s agreement to keep traffic moving through the Strait of Hormuz and allow further talks.

Iran’s Revolutionary Guards said they had targeted US military facilities in Bahrain and Kuwait, destroyed radar systems in Oman and hit fuel tanks and ammunition depots at Prince Hassan Air Base in Jordan in response to US strikes.

The move lifted the FTSE 350 energy index by 1.1%.

That helped the UK benchmark avoid the sharper losses seen in more growth-heavy markets, where higher oil tends to feed concerns about inflation and future borrowing costs.

Financials and miners drag

The weakest pocket of the market was investment banks and brokerages.

Plus500 fell 14.3%, making it the worst performer on the FTSE 250, after the trading-platform operator kept its annual outlook unchanged.

The reaction suggested investors were looking for stronger guidance after a volatile period in markets.

Precious-metals miners also weakened as gold fell more than 1%. Endeavour Mining, Fresnillo and Hochschild Mining each slipped around 0.6%.

The pressure came as rising oil prices revived inflation worries and strengthened expectations that the Federal Reserve may keep policy tighter for longer, a backdrop that tends to weigh on non-yielding gold.

Vodafone extends deal rally

Vodafone was the standout FTSE 100 gainer, rising 4.6% and extending Friday’s surge.

The move followed news that French billionaire Xavier Niel plans to buy a near-$6 billion stake in the telecoms group from UAE-based e&.

The deal would make Niel’s investment vehicle the largest shareholder in Vodafone, sharpening investor focus on potential strategic changes at the UK telecoms company.

Vodafone had already rallied sharply on Friday after the stake sale was announced.

For the broader FTSE 100, the session showed how sector composition can protect the index during geopolitical stress.

Energy strength kept the benchmark steady, but weakness in financials, miners and midcaps showed investors were still wary of earnings risk and higher rates.