FTSE 100 Slips As Middle East Tensions Rise After U.S.-Iran Peace Talks Fail

(RTTNews) - U.K. stocks drifted lower Monday morning amid rising tensions in the Middle East amid renewed threats from U.S. President Donald Trump to block the Strait of Hormuz following the collapse of U.S.-Iran peace talks over the weekend.

Following the failure of peace talks, U.S. President Donald Trump ordered blocking all ships trying to enter or leave the Strait of Hormuz, heightening fears of a prolonged conflict and disruptions to key energy supplies from the Persian Gulf region.

Trump announced that the United States Navy will block 'all maritime traffic entering and exiting Iranian ports' starting on Monday. "It's going to be all or none and that's the way it is," the president said.

Iran's navy chief asserted that the country is prepared to counter any military action and will not be intimidated by what it called "imaginary plans."

Oil prices rose sharply with the brent crude futures jumping about 9% to nearly $104 a barrel, fueling concerns about inflation and economic growth, and the possibility of interest rate hikes by central banks.

U.K.'s benchmark FTSE 100, which dropped to 10,525.95 earlier this morning, was down 36.35 points or 0.34% at 10,564.18 a little over half an hour before noon.

Shares from mining, banking and retail sectors drifted down, while energy stocks moved higher.

Associated British Foods fell 3.3%. IAG drifted down 2.7%. Barratt Redrow lost nearly 2.5%, while Burberry Group, Persimmon, Fresnillo, Pershing Square Holdings, Rolls-Royce Holdings, Antofagasta, Intercontinental Hotels Group, Standard Chartered, Weir Group and Compass Group lost 1.6%-2%.

Melrose Industries, Coca-Cola HBC, Airtel Africa, Informa, Next, Barclays, Standard Life, AstraZeneca, Lloyds Banking Group, Endeavour Mining, Natwest Group, Tesco and Marks & Spencer also drifted notably lower.

Convatec Group climbed 4.5%. Croda International, Metlen Energy & Metals, Admiral Group, Shell and BP gained 1.6%-2%. Pearson, The Sage Group, Intertek Group, 3i Group, IG Group and Centrica also moved notably higher.