Market snapshot: FTSE 100 looking for a floor
Despite a rebound on Wall Street overnight, European stocks have come under further selling pressure. ii's head of markets has the latest on events here and overseas.
3rd March 2026 08:41
by Richard Hunter from interactive investor
Investors buying on the dip intervened, enabling US markets to reverse initially sharp losses as the trading session progressed.
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Tech market heavyweights NVIDIA Corp (NASDAQ:NVDA) and Microsoft Corp (NASDAQ:MSFT) rose by 3% and 1.5% respectively, with some investors drawn to their cash generative nature which would likely be unaffected by the current conflict. This in turn drove the main indices affected by the tech pair's disproportionately heavy weighting, the S&P500 and Nasdaq, to marginal gains by the end of play.
At the same time, the oil price remains elevated (and ahead by 32% in the year to date), but the scale of its spike lessened, suggesting a more sanguine approach to the implications of the US/Iran situation. Oil price spikes usually follow conflict outbreaks, but the fact remains that escalation and duration is more of a concern than the immediate outlook, where many countries have accumulated stockpiles which could see them through the coming months.
In the meantime, themes echoed those seen elsewhere, with airline stocks bearing the brunt of any losses. This ranged from American Airlines Group Inc (NASDAQ:AAL), United Airlines Holdings Inc (NASDAQ:UAL) and Delta Air Lines Inc (NYSE:DAL) to Japan Airlines and Korean Air, as well as the major European carriers, all of which suffered both from the potential loss of income as well as the heightened cost of fuel given the underlying spike in the oil price. In contrast, defence stocks lived up to their name with investors seeking investment solace, while the gold price also drifted marginally higher.
The result of the volatile swings leaves the main indices with differing fortunes in the year so far. The more traditional Dow Jones has added 1.8%, while the S&P500 has scraped to a positive 0.5%, while the Nasdaq has lost 2.1% given the additional AI concerns and a rotation trade which has been to the benefit of the likes of the smaller cap Russell 2000, which has added 6% as a result.
The FTSE100 has taken a further opportunity to let some air out of the tyres after a stirring run this year, despite the resilience within the oil and defence sectors in particular and is having some difficulty at present in establishing a floor.
The themes were similar to the previous session, with a broad and sharp markdown offsetting any resistance offered by those sectors and leading to another notable dip at the open. The backdrop was not helped by a poorly received earnings update from Intertek Group (LSE:ITRK), whose shares fell by 9% at the open, although the primary index as a whole still remains ahead by 7.1% so far this year.
Banking stocks have been under pressure over the last few days. Quite apart from the wider economic concerns which the conflict could bring, which has weighed more heavily on the more internationally focused names such as Barclays (LSE:BARC) and HSBC Holdings (LSE:HSBA), the sector as a whole has been grappling with the implications of the collapse of UK mortgage provider Market Financial Solutions at the end of last week. This has built on concerns voiced by some bank CEOs on the fragility of the private lending market, and it remains to be seen whether the larger banks’ exposure could be an issue if this turns out to be the canary in the coalmine.
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Elsewhere, what had been hailed as a quiet spring statement from the Chancellor may now have to include some reaction to the Iranian conflict, although Office for Budget Responsibility (OBR) forecasts are likely to remain the main area of focus.
The FTSE100, meanwhile, will be the subject of a reshuffle with prices taken from the close of play today announced after the close tomorrow. The initial indications from the Stock Exchange were that easyJet (LSE:EZJ) and Rightmove (LSE:RMV) would lose their places at the top table to IG Group Holdings (LSE:IGG) and Tritax Big Box Ord (LSE:BBOX), in addition to which subsequent price moves suggest that Hikma Pharmaceuticals (LSE:HIK) may also fall to be replaced by Lion Finance Group (LSE:BGEO).
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