FTSE 100 falls 1.3% as Trump remarks lift oil fears

London’s FTSE 100 fell 1.3% to 10,519.17 by 1111 GMT on Wednesday after US President Donald Trump announced that an initial agreement to end the conflict with Iran had collapsed. The mid-cap FTSE 250 declined 1.7%, with both indexes touching their lowest levels in about a week.

Most sectors traded lower. Defence stocks were the largest drag, while energy was the only sector to post gains. Brent crude and US oil futures jumped more than 4% on concerns about potential supply disruption in the Middle East. Energy groups benefited from the rise in oil: BP gained about 3% and Shell rose 1.8%.

Precious metals miners fell 3.6% after gold prices dropped more than 1%. The fall in bullion followed renewed inflation concerns and expectations that central banks could keep interest rates higher for longer.

A survey of recruitment firms released on Wednesday showed modest improvement in Britain’s labour market last month, with temporary hiring strengthening and starting salaries rising. The survey did not change the market’s direction, which remained focused on geopolitical developments and commodity price moves.

Individual company moves added to the market mix. Travel operator Jet2 climbed 9.9% after it reported tourists were more willing to commit to travel plans following an easing of regional tensions. Affordable housing builder Vistry fell 6.4% after warning it expects a first-half pre-tax loss of about £30 million. Online trading group IG rose 2.5% after proposing a new holding company in Jersey as part of a strategic overhaul.

Trading was driven by the link between renewed Middle East tensions and commodity prices, with oil gains concentrated in energy names and weakness elsewhere across the market.