The FTSE 100 (^FTSE) and European stocks were higher on Wednesday morning as oil prices surged almost 4%, after the largest intra-day move since April 2023.
It comes as investors around the world are weighing the risk of threats to energy supplies after Iran’s missile attack on Israel threatened to escalate the Middle East conflict.
The Israeli prime minister has vowed to retaliate after Tehran fired a wave of at least 180 missiles at Israeli cities in the centre and south of the country yesterday.
BP (BP.L) and Shell (SHEL.L) were among the top gainers on London’s FTSE 100 index, thanks to the higher oil (BZ=F) prices, both rising around 2.8%.
TotalEnergies (TTE.PA), France’s oil supermajor, rose by 3% after opening, while Italy’s Eni (ENI.MI) gained 2.5%.
Mohit Kumar, chief economist for Europe at Jefferies, an investment bank, said: “Risk off dominated the markets on escalation in the Middle East. Oil moved higher on geopolitical risks. Markets did stabilise after the initial risk off and investors now wait for the response from Israel.”
Investors are weighing up whether Israel will respond directly to Iran, while Israeli forces continued to strike Beirut, Lebanon’s capital. Israel has also been fighting in Gaza, to its west, for almost a year after the attacks by Hamas on 7 October last year.
-
London’s benchmark index was 0.5% higher in early trade.
-
Germany’s DAX (^GDAXI) rose 0.1% and the CAC (^FCHI) in Paris headed 0.5% into the green.
-
The pan-European STOXX 600 (^STOXX) was up 0.4%.
-
Wall Street is set to open lower as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red.
-
The pound was flat against the US dollar (GBPUSD=X) at 1.3286.
Follow along for live updates throughout the day:
Live2 updates
Download the Yahoo Finance app, available for Apple and Android.