urope’s biggest financial markets were in the red on Monday following the weekend attack in Israel, although the FTSE 100 outperformed its peers on the continent.
Defence firms, such as BAE Systems, had a strong performance due to the fallout, while the instability in the region also pushed oil prices higher, providing a boost to Shell and BP.
Nevertheless, the index was still lower as it saw these rises offset by tougher sessions for airliners and tourism firms.
London’s top flight moved 0.03%, or 2.37 points, lower to finish at 7,492.21.
Across the Channel, Germany’s Dax index was 0.69% lower for the day and the Cac 40 closed down 0.59%.
Michael Hewson, chief market analyst at CMC Markets, said: “European markets have slipped back as the tremors of the weekend events in Israel continue to reverberate through financial markets.
“The big concern remains that the conflict extends beyond.
“A sharp rise in energy prices, along with concerns over an escalation outside the current counterparties of Hamas and Israel, as Israeli forces hit back hard, is keeping investors on edge, although the FTSE 100 has been a notable outlier due to a strong performance in the energy sector as well as defensives.”
The price of oil surged due to the deepened tensions across the Middle East and elevated worries over crude supplies.
A barrel of Brent crude rose by 3.97% to 87.94 US dollars (£72.04) as markets were closing in London.
Meanwhile, the pound was up O.23% at 1.220 US dollars and was 0.16% higher at 1.157 euros at market close in London.
In company news, Metro Bank shares made gains after the ailing challenger bank agreed a rescue deal with shareholders after crunch meetings over the weekend.
Shares climbed by 4.95p to 50.2p after it confirmed the deal, which saw a Colombian billionaire seize a controlling stake in the bank.
However, the banking stock was still around 50% lower for the month due to the concerns over its financial stability.
Chemicals giant Croda International was a notable faller during the session after it had to downgrade its profit forecast for the year despite plant shutdowns and reduced shift patterns to pull down costs.
The company said that it expects pre-tax profit to be between £300-320 million, down from a previous £370-400 million forecast.
Shares in the business, which is based near Goole, East Yorkshire, declined by 351p to 4,444p as a result.
Aviva shares took a slight step back after a flurry of takeover speculation boosted the insurance firm at the end of last week .
Shares had closed over 5% higher on Friday markets blog Betaville and The Times newspaper reported potential international takeover interest.
Aviva shares moved 7.5p back to 401.5p on Monday as investors took stock.
The biggest risers on the FTSE 100 were BAE Systems, up 44.4p to 1,025p, BP, up 14.7p to 520.3p, Shell, up 67.5p to 2,649p, Imperial Brands, up 34p to 1,703p, and Vodafone, up 1.3p to 76.1p.
The biggest fallers on the FTSE 100 were Croda, down 351p to 4,444p, IAG, down 9.6p to 146.75p, Next, down 314p to 6,900p, Spirax-Sarco, down 394p to 9,070p, and Marks & Spencer, down 9.4p to 221p.