FTSE 100 Ends Week Lower as Middle East Tensions Weigh on Markets

Britain’s stock market closed in the red on Friday, as escalating conflict in the Middle East pressured investor sentiment and dragged down share prices.

The FTSE 100 ended the session 34 points lower at 8,850, a drop of 0.4% from Thursday’s record closing high.

Airline stocks led the declines, with British Airways’ owner, IAG, down 3.7% and easyJet falling 2.7%. Investment firms Schroders and International Capital Group also slipped, down 3.4% and 2.5% respectively.

Precious metal miners and defence contractors outperformed amid the broader market weakness. Endeavour Mining rose 2.9%, Fresnillo gained 2.2%, while defence firms BAE Systems and Babcock advanced 2.8% and 1.9%, respectively, as investors sought safety in gold and defence-related sectors.

European Markets Slide as Israel-Iran Conflict Sparks Investor Caution

European stock markets fell sharply on Friday as tensions in the Middle East escalated, with Israel launching strikes on Iran and Tehran vowing retaliation.

In London, the FTSE 100 closed down 0.4%, while the more domestically focused FTSE 250 dropped 1%. Across the continent, the pan-European Stoxx 600 fell 0.9%, with France’s CAC 40 losing 1% and Germany’s DAX down 1.1%.

Patrick Armstrong, chief investment officer at Plurimi Wealth, said markets may rebound if the conflict proves short-lived. “If this is over quickly, we’ll see a fairly quick recovery, and the markets are essentially discounting the possibility that this drags out,” he said. “Our view is that it probably will be very short lived because Iran isn’t in a position to respond meaningfully, given the power dynamics between the two countries.”

Investor sentiment was also dampened by a lack of progress in US-China talks earlier in the week and ongoing uncertainty over a potential EU-US trade deal ahead of the July 8 tariff deadline set by Donald Trump.