By Patrick Munnelly, Market Strategist, Tickmill
The FTSE 100, which is known for its significant exposure to commodity-related companies, experienced a mixed performance on Monday reversing early gains to trade down 0.03% on the session.
The initial increase in the index’s value was driven by a notable surge in oil prices, which climbed more than 2% on the day. The jump in oil prices was attributed to the ongoing military clashes between Israeli and Hamas forces.
Geopolitical events and conflicts in oil-producing regions can lead to concerns about potential disruptions in the global oil supply, which in turn drives up oil prices.
The FTSE 100, being a reflection of the performance of many large British companies, includes several energy and commodity-related firms. Therefore, when commodity prices, such as oil, experience significant movements, it can have a direct impact on the index’s performance.
FTSE 100 biggest movers
In this case, the rise in oil prices contributed to the FTSE 100’s positive uptick in early trade with BP LON:BP. and Shell LON:SHEl vying for the top spot on the index. By the close, the stocks were up 2.9% and 2.6% respectively.
Sitting at the top of the blue chip index today is BAE Systems LON:BA., a major defence and aerospace company, BAE Systems shares saw a significant increase in its stock price, with shares rising by 4.5% at the close.
This notable uptick in the company’s stock came in the wake of recent developments in the Israel-Palestine conflict and their potential implications for defence contracts.
The surge in BAE Systems’ stock price followed an announcement regarding a substantial submarine contract made in the previous week of 3.95 billion GBP.
On the negative side of the ledger sits International Consolidated Airlines LON:IAG, shedding over 6% on the session. The losses come amidst reports the British Airways-owner is reportedly engaged in discussions with Boeing and Airbus regarding a potential order for widebody aircraft.
This information was reported by Bloomberg News, citing sources familiar with the matter. Widebody aircraft are typically larger, long-haul planes designed for intercontinental flights. Airlines often order these aircraft to expand their fleets, replace older planes, or meet growing demand for long-distance travel.
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