The FTSE 100 jumped over a hundred points on Wednesday morning, after the assassinations of two Hamas and Hezbollah leaders caused the index’s energy and commodities constituents to surge.
Shares in BP and Shell both rose by between two and three per cent in early morning trading, helping the index as a whole to jump by 1.5 per cent within three hours of market opening.
The market’s leap followed the death of two senior figures from Hamas and Hezbollah.
Ismail Haniyeh, the political leader of Hamas, was killed in a raid on his residence in Tehran, the capital of Iran, in the early hours of Wednesday morning.
And just hours earlier another air strike killed a commander of Hezbollah, a Lebanese militant group, who was killed in his residence in Beirut.
Ismail Haniyeh, the political leader of Hamas, attends a meeting with Iranian President Masoud Pezeshkian, on July 30, 2024 in Tehran, Iran. The next day, he’d be dead. (Handout photo by the Iranian Presidency via Getty Images)
News of Haniyeh’s death also pushed the oil price up as fears of escalation in the region rose following days of tension between Lebanon and Israel.
Brent crude, the international benchmark, rose 2.5 per cent to over $80 a barrel on the back of the news, while WTI crude rose by 2.8 per cent, as of 10 30 am UK time.
The FTSE rally could push the index up to a high for the month, a day after a poor set of results from spirits maker Diageo weighed on London’s performance.
“The common thread with these stocks and the UK market in general is that there is a lot of value on offer. said Russ Mould, investment director at AJ Bell. “Valuations aren’t expensive, particularly relative to the US market and the tech titans in the Nasdaq.”
London’s morning surge came despite yet another day of testing trading on the S&P 500, which fell by 0.5 per cent on Tuesday after more sell offs in big tech stocks.
Mould added: “When we get a big sell-off in tech names, investors often rotate to more value-orientated stocks and the UK market is full of them.”