FX.co ★ UK Stocks Fall for 2nd Day

London’s FTSE 100 fell 0.5% to close at 10,305 on Thursday, marking a second consecutive session of losses as rising oil prices stoked inflation fears against a backdrop of escalating tensions in the Middle East. Iran’s new supreme leader, Mojtaba Khamenei, declared that the Strait of Hormuz should remain closed and warned that all US military bases in the region would be attacked if they were not shut down.

Banks and financials led the market lower. HSBC dropped 6.1% after going ex-dividend, with additional pressure from a broker report highlighting its exposure to the Middle East. Barclays, Standard Chartered, Lloyds, and NatWest also retreated, losing between 2% and 5%. Rate-sensitive housebuilders, including Persimmon, Barratt, and Redrow, weakened as well, while airlines EasyJet and IAG also traded lower.

On the upside, Rentokil Initial gained 5.2% following an upgrade from UBS. Defense contractor BAE Systems advanced 3.1%, while energy majors BP and Shell rose 3% and 2.6% respectively. Utilities such as SSE, Centrica, and National Grid also moved higher.