FTSE 100 beats global indexes as defense and energy stocks rise

London markets posted gains on Wednesday morning after a unprecedented missile attack on Israel by Iran, which sent oil prices soaring and rattled global stocks.

The perspective of regional conflict looms large in the Middle East after Iran fired around 180 missiles at Israel on Tuesday, for which Israeli authorities promised there would be “consequences”.

Brent crude rose as much as four percent to $74.91 a barrel after White House officials warned that a strike was imminent. It is now trading at $74.63.

Early Wednesday, Israel announced it would send “additional forces” to its ground operation in Lebanon, which started earlier this week.

“Events have set a tone for reducing geopolitical risk, with clear ramifications across multiple asset classes,” said Jim Reid, strategist at Deutsche Bank.

London’s blue-chip FTSE 100 proved more resilient than most other global stock indexes, given defense weight and energy giants.

The FTSE 100 gained 0.36% to 8,306.23 on Wednesday morning, while the mid-cap FTSE 250, which is more closely aligned to the health of the UK economy, was largely flat at 20,915.20.

BP, BAE Systems and Shell were among the biggest gainers on the FTSE 100 in early trading, up two per cent, 1.5 per cent and 1.2 per cent respectively.

“A subdued tone hit trading as markets brace for further fallout from the Middle East crisis,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“The FTSE 100 headed higher in early trade, partly due to its defensive nature, helped by strength in energy stocks as oil prices continue their upward march.”

US stocks slipped at the close on Tuesday as investors digested events in the Middle Eastin addition to a closely watched survey showing that manufacturing activity continued to decline in September.

The S&P 500 ended 0.9% lower, while the Dow Jones Industrial Average fell 0.4%.

Europe’s benchmark Stoxx 600 fell 0.4 percent at Tuesday’s close, while Germany’s Dax, made up of 40 top companies, fell 0.6 percent.

Elsewhere, gold rose as much as 1.3 percent on Tuesday to a record near $2,673 an ounce as investors flocked to the safe-haven asset. It was trading at $2,649 Wednesday morning.

After AM city

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