Oil above $100 props up FTSE 100, but sector divergence widens

 
Lale Akoner, global market analyst, says: “The escalation in the Middle East, and particularly disruption through the Strait of Hormuz, has pushed oil prices back above $100, reinforcing energy as the key macro driver for markets. For the FTSE 100, this creates a unique dynamic. Its heavy weighting in oil majors like BP and Shell provides a cushion, helping the index hold up better than many global peers.

“However, beneath the surface, the picture is more nuanced. Higher energy prices are feeding into inflation expectations and weighing on rate-sensitive and consumer-facing sectors. Airlines, housebuilders, and retail names are already under pressure as fuel costs rise and household spending power weakens.

“From an investor perspective, this is less about broad risk-off and more about rotation. The FTSE’s resilience reflects its composition, but the underlying market is becoming more selective, favouring cash-generative, defensive sectors over cyclicals exposed to the consumer slowdown.”