London midday: Stocks maintain gains; BP, Shell boosted by surging oil prices

London stocks were still firmer by midday on Monday, with defence and energy shares pacing the advance, as oil prices surged amid tensions in the Middle East.

The FTSE 100 was up 0.3% at 7,515.54.

Susannah Streeter head of money and markets at Hargreaves Lansdown, said: "The shocking attacks in Israel have sent the price of oil soaring, as investors assess the potential for the conflict to disrupt supply in the Middle East, if other countries are drawn in. With the Israeli government warning of a long and difficult war, there are concerns that deep and incessant retaliative strikes on Gaza could potentially bring Iran into the conflict and have an impact on the flow of energy in the region.

"The strikes and incursions by Hamas have sent the price of a barrel of the benchmark Brent crude, up by more than 3%, to trade above $87 a barrel. It’s the latest surprise twist in the path of oil prices, with the commodity pushed upwards partly due to supply cuts by Saudi Arabia and Russia, then buffeted down by concerns about a weakening global growth outlook. This latest jump will fuel inflationary worries, at a time when investors are already jittery about the interest rates potentially staying higher for longer.

"Nerves are showing signs of being frayed again just as investors had started to breathe a sigh of relief that the US might be heading for a softer landing, despite the high level of interest rates. Investors had cheered Friday’s jobs data given that it showed continued strength of the US economy, with a bumper payroll number, but also indicated that wage growth was moderating. With geo-political risk sharply in focus we’ve seen investors retreat into safe haven assets, with the dollar and the yen edging up, while gold has jumped 1%."

In equity markets, defence contractor BAE Systems was the standout gainer on the FTSE 100, while oil giants BP and Shell followed close behind, benefiting from the jump in oil prices.

Harbour Energy, Diversified Energy and Ithaca Energy also gained.

On the downside, travel stocks slid, with BA and Iberia owner IAG, InterContinental Hotels, Wizz Air, easyJet and Carnival all lower amid concerns about potential travel disruption from the Israel-Palestine conflict.

Shares in Energean - which is developing a gas field offshore Israel - tumbled.

Croda fell after the specialty chemicals firm downgraded its full-year profit outlook following a weaker-than-expected third quarter.

Fashion and homeware retailer Next traded down after JPMorgan Cazenove placed the shares on ‘negative catalyst watch’.

Outside the FTSE 350, Metro Bank rallied after striking a deal with investors to shore up its balance sheet.

Market Movers

FTSE 100 (UKX) 7,515.54 0.28%
FTSE 250 (MCX) 17,621.72 -0.62%
techMARK (TASX) 4,118.82 0.53%

FTSE 100 - Risers

BAE Systems (BA.) 1,021.00p 4.12%
BP (BP.) 519.70p 2.79%
Shell (SHEL) 2,651.50p 2.71%
Fresnillo (FRES) 536.20p 2.45%
Compass Group (CPG) 2,055.00p 1.93%
Imperial Brands (IMB) 1,691.50p 1.35%
GSK (GSK) 1,517.80p 1.23%
Endeavour Mining (EDV) 1,535.00p 1.19%
National Grid (NG.) 946.20p 1.13%
Rentokil Initial (RTO) 593.60p 1.06%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 149.55p -4.35%
Next (NXT) 6,924.00p -4.02%
Ocado Group (OCDO) 552.80p -3.12%
Croda International (CRDA) 4,653.00p -2.96%
JD Sports Fashion (JD.) 139.35p -2.65%
Marks & Spencer Group (MKS) 224.30p -2.65%
Hargreaves Lansdown (HL.) 747.60p -2.61%
Schroders (SDR) 389.80p -1.91%
IMI (IMI) 1,515.00p -1.81%
Ashtead Group (AHT) 4,818.00p -1.61%

FTSE 250 - Risers

CAB Payments Holdings (CABP) 213.50p 5.69%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 443.50p 2.19%
QinetiQ Group (QQ.) 314.60p 2.14%
Centamin (DI) (CEY) 81.40p 2.13%
Bakkavor Group (BAKK) 97.00p 2.11%
Diversified Energy Company (DEC) 74.15p 1.99%
Foresight Solar Fund Limited (FSFL) 89.90p 1.93%
Harbour Energy (HBR) 244.50p 1.79%
Wood Group (John) (WG.) 150.30p 1.55%
Impax Environmental Markets (IEM) 365.50p 1.53%

FTSE 250 - Fallers

Energean (ENOG) 851.00p -17.94%
Aston Martin Lagonda Global Holdings (AML) 237.80p -4.73%
easyJet (EZJ) 429.40p -4.43%
Wizz Air Holdings (WIZZ) 1,852.00p -4.07%
International Distributions Services (IDS) 254.00p -3.09%
Ceres Power Holdings (CWR) 271.40p -3.07%
Ashmore Group (ASHM) 180.80p -2.90%
Genuit Group (GEN) 307.50p -2.84%
Softcat (SCT) 1,440.00p -2.57%
Man Group (EMG) 226.90p -2.45%