Rolls-Royce shares slide as FTSE 100 plunges amid Iran war
A dramatic stock plummet from blue-chip giant Rolls-Royce helped drag the FTSE 100 deeper into the red on Monday morning as fears surrounding the economic impact of the Iran war ramped up.
Shares in the aerospace giant were down as much as five per cent at open, before clawing back some gains to a three per cent loss at 1,225.00p.
It came amid a wider sell-off across the blue-chip index, with the FTSE 100 falling around 1.5 per cent to 10,131.97p.
Neil Wilson, investor strategist at Saxo Markets, said “global air travel demand worries” were helping weigh on Rolls-Royce with flight paths squeezed amid the conflict in the Middle East.
The airspace over the southern half of Azerbaijan faced closure last week putting additional pressure on limited airspace after flight traffic had already faced disruption in the Gulf, which is a significant hub for the global airline industry.
Wizz Air warned last week the conflict would reduce its income by €50 for the financial year ending March 31 sending airline stocks crashing,
British Airways owner IAG and Easyjet have sank over ten per cent in the last week.
Investors dump stocks as Iran war rumbles on
“Investors are now weighing up the prospect of the Iran conflict lasting longer than they previously thought,” Dan Coatsworth, head of markets at AJ Bell said.
Coatsworth added as risk appetite “evaporated” investors were fleeing to “lock in profits on areas of the market that have served them well in recent months and years, such as shares in Rolls-Royce and Lloyds, and gold”.
Lloyds was down 1.7 per cent in early trading, whilst gold miner Fresnillo – the FTSE 100’s top riser of 2025 – tumbled two per cent.
Fears were further elevated after the price of oil has breached the $100 mark for the first time since the energy crisis in 2022 on Monday morning.
The latest price surge fanned the flames of inflation fears and have led to investors pricing against the notion of an interest rate cut at the next Bank of England meeting.
The commodity’s bounce did however put some stocks on the march, with oil giant Shell rising 1.7 per cent to 3,188.00p and its rival BP up 1.3 per cent to 505.50p.