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02.03.202617:05:20UTC+00UK Stocks Close on Lower Note

The FTSE 100 closed about 1.2% lower at 10,780 on Monday, mirroring a global selloff sparked by the Middle East conflict after US and Israeli strikes on Iran over the weekend. Rising geopolitical risks and mounting uncertainty prompted investors to exit cyclical stocks and rotate into oil producers and defense firms.

Travel stocks were hit hardest, as airspace closures in the Middle East, flight suspensions, and higher oil prices pressured airlines, tour operators, hotels, and cruise operators. British Airways parent IAG dropped 5.5% after canceling flights, while cruise operator Carnival sank 8.1%.

Financials also came under pressure, with Standard Chartered down 5.3%, Barclays off 3.4%, and Lloyds Banking Group losing 2.6%. Among consumer names, JD Sports Fashion slid 5% and Burberry Group declined 4.7%.

In contrast, defense stocks outperformed, led by BAE Systems, which jumped 6.1%. Energy shares also advanced strongly, supported by a sharp rise in oil and gas prices: BP gained 2.1%, and Shell added 1.9%.

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