TLDR
- FTSE 100 dips amid US-Russia oil tensions and weaker consumer shares.
- Shell, BP, and mining stocks slip as global oil market jitters rise.
- Defence stocks gain on Atlantic tensions, BAE Systems leads blue chips.
- Greggs, Hays, and PageGroup drop after profit updates and broker cuts.
- Pound edges lower while UK assets remain mostly flat in choppy trade.
The FTSE 100 ended lower amid heightened US-Russia tensions after the US seized a Russian-flagged oil tanker. Shares traded near 10,019, down 0.29% as oil and mining sectors softened.
The pound continued to slip, heading for a third consecutive day in decline against the US dollar.
The US intercepted the tanker in the Atlantic over alleged sanctions violations and also targeted a dark fleet ship carrying Venezuelan oil. The move intensifies global geopolitical risks and underscores potential volatility in energy markets. Investors monitored developments closely as crude prices nudged above $60 per barrel following unexpected US inventory declines.
Consumer stocks showed sharp moves during the session. Primark-owner AB Foods fell sharply after a profit warning, posting its biggest drop since early pandemic days. Tesco also declined after missing high expectations, while Marks & Spencer steadied with reassuring updates.
Oil and Mining Stocks Weaken Amid Geopolitical Pressure
Shell shares dropped 2.6% to £25.85 and BP lost 0.8%, trading at 414p after the tanker seizure. Mining stocks also weakened with Antofagasta down 1.4% and Fresnillo, Rio Tinto, and Glencore down 0.4%. Market participants noted potential risks if Russia-Ukraine peace talks progress, which could lead to easing sanctions on Russian fossil fuels.
The latest geopolitical events are influencing global oil supply expectations. Increased output from seized shipments may reduce prices, affecting energy producers. Analysts highlighted previous false dawns in oil markets but noted Brent crude remains resilient above $60 per barrel.
Investors responded to broader energy market uncertainty by reassessing positions in resource stocks. Oil sector volatility also affected mining firms connected to fuel and commodity prices. This contributed to modest declines across FTSE-listed energy and resource companies.
Defence and Other Sectors See Mixed Performance
Defence stocks gained as Atlantic tensions heightened, with BAE Systems rising 6.1% to £20.45, leading blue-chip gains. The FTSE 250 fell 0.34% to 22,802, with losses concentrated in consumer-facing and small-cap firms. Greggs slumped 6.9% to £16.50 after reporting flat 2026 profit forecasts.
Recruitment firms also faced pressure, with Hays dropping 4.6% to 52p after a broker downgrade. PageGroup shares fell 4.5% following reduced target guidance from the same broker. Other consumer and high-street businesses remained under scrutiny as market participants weighed economic signals and earnings updates.
House price declines in December and government support discussions for pubs added context to muted UK asset movements. Despite turbulence in individual stocks, overall FTSE 100 performance remained mostly flat. Market participants anticipate further reactions to geopolitical developments and corporate updates in coming sessions.
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