Must read: oil and defence stocks, house prices
ii’s head of investment rounds up the morning’s big news.
12th March 2026 09:01
by Victoria Scholar from interactive investor
Global markets
European markets have opened lower amid risk-off sentiment as the Middle East turmoil intensifies. Defence stocks such as BAE Systems (LSE:BA.) and Babcock International Group (LSE:BAB) are outperforming, leading the FTSE 100 risers, while airlines like easyJet (LSE:EZJ) and ex-dividend stocks such as HSBC Holdings (LSE:HSBA) and Schroders (LSE:SDR) are at the bottom of the basket.
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The oil rally has resumed with WTI and Brent crude up around 4-5% after Brent briefly broke back above $100 a barrel. European natural gas futures are also climbing amid disruption to LNG shipments. The International Energy Agency’s (IEA) coordinated release of 400 million barrels of oil failed to calm markets, with markets concerned about Iran’s multiple attacks on shipping infrastructure in the Gulf, weighing on global energy supplies. Iraq oil ports have now fully stopped following attacks on two oil tankers.
US futures are pointing to a weaker open after the Dow Jones closed 0.6% lower on Wednesday, while the Nasdaq and S&P 500 ended flat. The US dollar has strengthened, driven by safe-haven demand, fears of inflation, and higher for longer interest rate expectations.
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RICS House price balance
The RICS house price balance fell to -12 in February versus -10 in January, falling short of expectations for a rise to -9. New buyer enquiries tumbled to -26 in February versus -15 in January. The data covers the period between 23 February and 9 March.
This data is the first indication of how the Iran war and the sharp rise in energy prices are likely to weigh on the UK housing market in the coming months.
With a rate cut in March now off the table, and geopolitical turmoil hurting consumer confidence, it looks like the property market is bracing for a period of weakness. We could see buyers and sellers stand back in wait-and-see mode, trying to understand whether there will be a significant inflationary impulse in the economy that will make mortgage rates less affordable for many potential buyers.
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