FTSE 100 movers: Banking stocks drop sharply on macro fears

(Sharecast News) - Sharp falls across the banking sector were weighing on the top-tier index in London on Thursday, with HSBC, Barclays, Standard Chartered, Lloyds and NatWest registering falls of between 3.5% and 6.7%.

Concerns about the global economic fallout of the US-Iran war were weighing on global cyclical stocks, with banking shares across Europe also trading in the red, as another surge in the price of oil added to inflationary pressures.

Brent jumped over 9% to top $100 a barrel again on Thursday afternoon on the back of rising concerns about shipment disruptions along the key Strait of Hormuz, while hostilities again intensified across the Middle East, with more vessels hit in the Gulf, along with a fuel facility in Bahrain and an Italian military base in Iraq.

Prices climbed despite members of the International Energy Agency agreeing to release an unprecedented 400m barrels of oil stockpiles to help curb the economic fallout from the war.

"Markets are already pricing in the unwelcome return of uncomfortable levels of inflation, with bond yields rising significantly and investors eyeing the UK as particularly sensitive to an energy shock. Preventing inflation from spiralling once again will be at the forefront of rate setters' minds," said Danni Hewson, head of financial analysis at AJ Bell, in a note ahead of the Bank of England's policy meeting on 19 March.

Also on bank shareholders' minds was Wednesday's news that challenger Revolut has been granted a full UK banking licence following regulatory approval from Prudential Regulation Authority to exit the so-called mobilisation phase.

Airlines easyJet and IAG were also heavy fallers as oil prices spiked higher. News that packaging holidays group On the Beach had suspended earnings guidance will have also weighed on sentiment across the travel sector.

In contrast, costlier crude was bolstering the share price of energy majors BP and Shell, which have now gained 10% and 8% since the war began at the end of February, respectively. The ongoing conflict was continuing to boost defence contractor BAE Systems, which has risen 8% since the fighting started.

Another high riser was pest control group Rentokil Initial after UBS upgraded the stock to 'buy' from 'neutral' and lifted the price target to 540p from 430p, citing accelerating earnings growth in North America over the coming years.

Investment manager M&G was trading firmly in the red after reporting flat full-year profits, as growth in Life and higher fee-based earnings in Asset Management was offset by lower performance fees in Asset Management and lower investment income in both Asset Management and Corporate Centre.

FTSE 100 - Risers

Rentokil Initial (RTO) 487.50p 4.02% BAE Systems (BA.) 2,288.00p 3.14% London Stock Exchange Group (LSEG) 8,682.00p 3.06% Flutter Entertainment (DI) (FLTR) 8,310.00p 3.06% The Sage Group (SGE) 857.00p 2.89% BP (BP.) 524.00p 2.80% Bunzl (BNZL) 2,288.00p 2.79% Centrica (CNA) 205.60p 2.69% Airtel Africa (AAF) 347.00p 2.67% Sainsbury (J) (SBRY) 343.20p 2.57%

FTSE 100 - Fallers

HSBC Holdings (HSBA) 1,189.20p -6.68% Barclays (BARC) 388.40p -5.78% Standard Chartered (STAN) 1,585.00p -4.67% M&G (MNG) 286.50p -4.62% Persimmon (PSN) 1,216.00p -4.45% Lloyds Banking Group (LLOY) 95.18p -3.88% NATWEST GROUP (NWG) 568.20p -3.50% easyJet (EZJ) 385.30p -3.45% Antofagasta (ANTO) 3,710.00p -3.27% International Consolidated Airlines Group SA (CDI) (IAG) 362.70p -3.23%