London stocks closed sharply lower after fresh strikes between the US and Iran rattled investor sentiment and pushed oil prices higher.
The FTSE 100 fell 1.7% to close at 10,489.04, while the more domestically focused FTSE 250 slid 1.5% to 23,017.64.
Energy stocks were among the few bright spots. BP rose 3.5% and Shell gained 2.3% as crude prices climbed after US President Donald Trump said the ceasefire with Iran was “over”.
Brent crude, the international benchmark, rose above $80 a barrel for the first time in more than two weeks as traders priced in the risk of further disruption to Middle East energy supplies.
European markets also came under pressure. In France, the CAC 40 fell 2.2%, while the STOXX 600 declined 1.6%.
Madrid-listed stocks were hit particularly hard after Trump ordered a halt to all trade with Spain. Spain’s benchmark IBEX 35 index dropped 2.7% after the US president described the country as “a wasted cause” and a “terrible partner”.
The broader sell-off reflected growing concern that renewed escalation in the Middle East could lift energy costs, fuel inflationary pressure and complicate the outlook for interest rates.
