The FTSE 100 moved higher on Monday as a sharp rise in oil prices helped London shrug off weakness across technology stocks.
Britain’s blue-chip index gained 0.3% to 10,684.56, benefiting from its relatively low exposure to the technology sector compared with other major global markets.
Energy stocks were supported as Brent crude climbed back above $108 a barrel, extending its recent surge amid continued geopolitical tensions and concerns over global oil supplies.
Shell and BP both rose more than 1% after a strategically important pipeline through Saudi Arabia was attacked by an Iran-backed militia, helping push crude prices more than 2.5% higher.
The strength of London’s heavyweight energy sector helped offset weakness elsewhere in the market and allowed the FTSE 100 to outperform more technology-heavy indices.
The domestically focused FTSE 250 moved in the opposite direction, falling 0.3% to 23,904.55.
The divergence underlined the unusual impact of the latest oil shock on UK equities. While higher crude prices are supporting the FTSE 100 through its large weighting towards energy companies, they present a more difficult backdrop for businesses exposed to the domestic economy.
Sustained oil prices above $100 risk adding further inflationary pressure, increasing costs for companies and households and potentially keeping interest rates higher for longer.
For now, the FTSE 100 is benefiting from the surge in energy prices, but the weaker FTSE 250 suggests investors remain cautious about what another prolonged period of expensive oil could mean for the wider UK economy.
