FTSE 100 dips as oil rises, energy gains fail to lift market

The FTSE 100 fell 0.3% to 10,461.14 and the FTSE 250 declined 0.7% on Tuesday as rising oil prices supported energy stocks while escalating US-Iran tensions hit travel and financial shares.

Markets in London opened lower after the United States carried out strikes against Iran for a third consecutive night and President Donald Trump announced a blockade of Iranian shipping and a 20% fee on cargo transiting the Strait of Hormuz.

The developments pushed Brent crude about 3% higher to roughly $85 a barrel. The energy index rose 1.8% on the session.

BP advanced 2.3%, reporting stronger oil trading activity and improved refining margins that it expects will support second-quarter earnings.

Industrial metals miners also gained. Atalaya Mining Copper, Glencore and Rio Tinto rose between about 1.6% and 3.5% during the session.

Travel and leisure stocks were the weakest sector, falling 2.4%. InterContinental Hotels Group declined 3.7%, the largest faller on the FTSE 100.

Banks weighed on the benchmark as investors held back ahead of earnings reports from major US banks scheduled later in the day.

Asset manager Ashmore slipped 1.8% despite reporting quarterly net inflows that exceeded expectations. Debenhams Group gained 3.1% after reporting continued positive trading momentum through June and July, citing stronger sales margins and lower customer returns.

Investors remained cautious ahead of an expected US inflation report and comments from Federal Reserve Chair Kevin Warsh.

Traders cited the combination of military action, trade disruptions through the Strait of Hormuz and upcoming US economic data as the main factors influencing market sentiment.