Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

FTSE falls as Obama authorises Iraq air strikes

FTSE falls as Obama authorises Iraq air strikes

The FTSE 100 has continued to slump on geopolitical tensions, with the prospect of US military strikes against Iraq militants sparking further anxiety for investors already worried about the mounting tensions between Russia and the West.

The UK blue-chip index fell 47 points, or 0.7% to 6,551 after US president Barack Obama authorised strikes air strikes against Islamist militants.

Obama said he had given the green-light to the strikes to prevent the potential for 'genocide' against thousands of minority Iraqis in the north of the country driven to a mountain-top refuge.

The move has taken its toll on markets already weighed down by the mounting tension between Russia and the West, with the FTSE 100 heading towards a near four-month low.

'The geopolitical landscape already looks explosive with tensions rising in Ukraine and with Russia but the appearance of another flash point and the possibility of being drawn into something deeper in Iraq is set to drag sentiment even lower,' said Jonathan Sudaria, dealer at Capital Spreads.

Almost all sectors were down in a broad-based slump of the index, with the number of stocks in positive territory barely into double figures. Defensive stocks such as supermarkets Tesco (TSCO) and Morrisons (MRW) were among the few to make gains, rising 0.9% to 246p and 0.5% to 168.1p respectively.

Gold and silver miner Fresnillo (FRES) was the top FTSE 100 riser, jumping 2.1% to £10.01 as the geopolitical tensions prompted a surge in the gold price, with investors rushing to the safe haven asset. Gold climbed to a three-week high of $1,316.60 an ounce after Obama's announcement, its highest level since 18 July.

'Mid cap' stock Afren (AFRE) meanwhile fell 4.7% to 94.9p, as the fighting in Iraq forced the oil group to suspend operations at its Barda Rash oilfield in Iraqi Kurdistan.

The stock has fallen heavily over the past few weeks, after the oil explorer announced it had temporarily suspended chief executive Osman Shahensah and chief operating officer Shahid Ullah pending an investigation into payments.

'Small cap' stock Hyder Consulting (HYC) rose 8.6% to 700.5p on news that Japanese group Nippon Koei UK Topco (1954.T) was attempting to gazump Dutch group Arcadis' (ARDS.AS) 650p-per-share takeover bid with a 680p-per-share offer. Arcadis said it was considering its position.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play JPM’s Negyal: Back divis to temper EM volatility

JPM’s Negyal: Back divis to temper EM volatility

Omar Negyal, co-manager of the JPMorgan Global Emerging Markets Income trust, says a dividend approach to emerging markets reduces the volatility of investing in the asset class.

Play WMR: Why Russia will lose this war

WMR: Why Russia will lose this war

Author and journalist Adam Lebor believes a perfect storm is brewing when it comes to the Russian economy. .

Play WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

Chief economic adviser to London mayor Boris Johnson outlines the geo-political risks in Asia and explains why the risk of another eurozone crisis must not be underestimated.

Your Business: Cover Star Club

Profile: 'new normal' now is as dangerous as when it was applied to tech

Profile: 'new normal' now is as dangerous as when it was applied to tech

7IM's CIO Chris Darbyshire says he has been re-energised by his new role, but has little time for 'new normal' doom-mongers

Wealth Manager on Twitter