The FTSE 100 narrowly avoided a 300-point slide on Tuesday, but still fell 2.75% to slip back below the 10,500 mark — effectively returning the benchmark to levels seen a fortnight ago.
Mid-cap stocks also came under heavy pressure. The FTSE 250 dropped 735 points, or 3.1%, to 22,688.75 as the sell-off spread across the broader London market.
Precious metals were not immune to the volatility. Gold prices fell by around 4%, while silver tumbled roughly 8%, weighed down by a firmer US dollar and mounting inflation concerns.
UK bank shares tumble on Middle East fears
Banking stocks led the decline in London on Tuesday, as investors judged the sector to be particularly vulnerable to escalating tensions in the Middle East.
Shares in HSBC fell 4.94% on the day, leaving the lender down around 9% since Friday, prior to the launch of US and Israeli strikes. Lloyds Banking Group dropped 3.2%, while NatWest Group lost 2.46%. Barclays declined a further 3.56%, adding to recent losses driven by concerns surrounding exposure to the private credit market.
The sell-off was mirrored across the continent, with the STOXX Europe 600 Banks index sliding 4.52% to its lowest level in three months.
