The FTSE 100 (^FTSE) and European stocks headed lower on Thursday morning as Israel and Iran launched fresh attacks. Iran warned that the US would “bitterly regret” torpedoing an Iranian warship in the Indian Ocean, while Israel said it had begun a “large-scale” attack on Tehran.
Global markets have been thrown into turmoil this week after the US and Israel began strikes against Iran over the weekend.
Tehran also effectively shut down the Strait of Hormuz, through which a fifth of the world’s crude and considerable liquefied natural gas (LNG) supplies travel, sending oil prices soaring.
Brent (BZ=F) has climbed toward $84 a barrel, at the time of writing, after jumping 12% over the first three days of the week, while West Texas Intermediate (CL=F) sits around $77.
The cost of government borrowing has also risen again on Thursday, following the latest spike in the price of oil, amid worries that continued conflict in the Middle East will deliver an inflation shock.
Bond yields, the return governments promise to buyers of their debt, rose across Europe, with eurozone government bonds set for their steepest weekly selloff in a year. Germany’s benchmark 10-year bund was up four basis points to 2.79%.
Meanwhile, the yield on 10-year UK gilts rose by seven basis points to more than 4.5%, mirroring sharp rises seen earlier this week.
-
London’s benchmark index (^FTSE) was 0.3% down in early trade.
-
Germany’s DAX (^GDAXI) dipped 0.6% and the CAC (^FCHI) in Paris headed 0.7% into the green.
-
The pan-European STOXX 600 (^STOXX) was 0.5% lower.
-
Wall Street is set for a negative start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red.
-
The pound was 0.4% down against the US dollar (GBPUSD=X) at 1.3322
Follow along for live updates throughout the day:
LIVE 2 updates
Download the Yahoo Finance app, available for Apple and Android.