The FTSE 100, the UK’s benchmark stock index, opened lower on Friday, June 13, 2025, dropping 50.60 points or 0.6% to 8,834.32, as escalating tensions in the Middle East rattled global markets. This decline follows a record closing high on Thursday, with futures indicating a further downturn of 0.5% earlier in the day.
The broader European markets mirrored this sentiment, with the pan-European STOXX 600 index falling 1.2%, the German DAX slipping 1.4%, and the French CAC 40 declining 1.35%.
The catalyst for this market slump was Israel’s large-scale airstrikes on Iranian nuclear and military targets early Friday, including over 100 facilities such as the Natanz complex and missile sites near Tehran.
Iran retaliated with a counterattack involving 100 drones and vowed a “strong response,” heightening fears of a broader regional conflict. This geopolitical escalation, dubbed “Rising Lion” by Israel, has sent shockwaves through financial markets already cautious due to U.S. tariff policies and global growth concerns
While the FTSE 100 experienced a milder drop compared to other European indices, certain sectors bore the brunt of the uncertainty. The travel and leisure sector plummeted 3.1%, with British Airways parent company IAG tumbling 4.8%, Lufthansa declining 4.6%, and EasyJet falling 4.3%. Cruise operator Carnival’s London-listed shares also slipped 5%, reflecting fears of disrupted travel amid rising oil prices and geopolitical risks .
Conversely, defensive sectors prospered as investors flocked to safe-haven assets. Energy stocks surged with oil prices, as Brent crude jumped over 7% to $74.79 per barrel, driven by concerns over potential supply disruptions in the oil-rich Middle East. Shell and BP both rose 1.9% in early trading. Defense stocks also gained, with BAE Systems recording an uptick amid expectations of increased global defense spending, while gold prices soared to $3,422.21 an ounce, boosting companies like Endeavour Mining.
Analysts warn that continued escalation could risk up to 14 million barrels per day of oil supply through the Strait of Hormuz, potentially driving prices to $120 per barrel—a level not seen since 2008. As markets brace for further volatility over the weekend, the FTSE 100’s performance underscores the delicate balance between geopolitical risks and sector-specific resilience.
