Closing post
Time for a recap.
Financial markets have been gripped by the shocking attack by Hamas on Israel on Saturday, which has driven up energy prices and hammered shares in airlines.
The oil price is up around 4% in late trading, with Brent crude rallying toward $88 per barrel, as traders calculate that rising tensions across the Middle East could affect output from leading oil producers.
As Capital Economics point out this evening:
First and foremost, the renewed fighting between Hamas and Israel since the weekend is a humanitarian tragedy.
The upshot is that the longer the conflict goes on or the more widespread it becomes, the greater the risks to regional oil supply will be.
Gas prices have jumped sharply, after Israel suspended production at the Tamar gas field in the eastern Mediterranean.
Shares in defence producers have jumped, with BAE Systems up 4.7% in London and Northrop Grumman gaining 10% in New York.
$LMT $RTX
— *Walter Bloomberg (@DeItaone) October 9, 2023
🔸 LOCKHEED MARTIN SHARES UP 8%, RTX SHARES UP 4.2%, NORTHROP GRUMMAN SHARES UP 9%
But airlines including IAG (-5.6%), Wizz Air (-6.8%) and easyJet (-5.2%) and holiday firm TUI (6.3%) are down, on concerns the crisis will hit travel.
As investors searched for safe havens, the US dollar, European government bonds and gold all rallied today.
The conflict has also prompted Nvidia to cancel an AI conference in Tel Aviv later this month.
Israel’s central bank stepped in to stabilise its currency this morning. The Bank of Israel said it will sell up to $30bn of foreign currency in the open market to maintain stability, after the shekel hit its lowest level in almost eight years against the US dollar.
Here’s the latest:
And here’s our live-blog on the conflict:
In other news…
Harvard professor Claudia Goldin, has won the Nobel Prize for economics for her work advancing the understanding of women’s labour market outcomes.
The Royal Swedish Academy of Sciences said Goldin had uncovered key drivers of gender differences in the labour market.
Jakob Svensson, Chair of the Committee for the Prize in Economic Sciences, explained:
“Understanding women’s role in the labour is important for society. Thanks to Claudia Goldin’s groundbreaking research we now know much more about the underlying factors and which barriers may need to be addressed in the future.”
Metro Bank is launching a fresh cost-cutting drive after the embattled lender clinched a £925m rescue package from investors last night:
Britain’s manufacturers are urging the chancellor, Jeremy Hunt, to announce a “major MOT” of the UK’s “uncompetitive” business tax and regulatory system in his autumn statement next month.
FTSE 100 close
BAE Systems has ended the day as the top riser on the FTSE 100 index, up 4.5%.
BP and Shell both gained almost 3% by the close, lifted by the jump in the oil price today.
But the index was dragged down by British Airways’ parent company IAG (5.8%), and chemicals group Croda (-7.2%) which cut its profit guidance today.
This has left the FTSE 100 down 2 points, or 0.03%, at 7492 points.
Updated
