UK equities fell sharply as intensifying hostilities involving Iran sparked a broad global market selloff, sending investors into defensive positions and driving volatility across major asset classes.

The FTSE 100 and FTSE 250 both opened lower, tracking declines in Asian and US futures markets as concerns mounted over the risk of a wider regional conflict.

Energy prices surged in early trading, with Brent crude rising on fears of potential disruption to supply routes through the Strait of Hormuz, a critical artery for global oil shipments.

The spike in oil supported shares of major energy producers, partially cushioning the benchmark index, but declines across banking, travel and consumer sectors outweighed those gains.

Analysts said the market reaction reflected a classic risk-off move, with investors rotating into traditional safe-haven assets such as gold and government bonds.

Sterling also weakened slightly against the US dollar as currency markets adjusted to rising geopolitical uncertainty.

The selloff follows reports of expanding missile and drone exchanges in the Middle East, raising concerns about broader economic fallout if tensions escalate further.

Market participants are particularly sensitive to any threat to energy infrastructure or shipping lanes, given the potential knock-on effects for inflation and global growth.

Central bank policy expectations remain in focus as well, with traders weighing whether sustained energy price increases could complicate efforts to bring inflation back toward target levels.

Higher oil costs risk feeding into transport and production expenses, potentially prolonging price pressures in advanced economies.

Despite the sharp moves, some analysts cautioned that markets have historically stabilised after initial geopolitical shocks, depending on whether conflicts broaden materially or remain contained.

For now, however, volatility remains elevated as investors assess the scale and duration of the unfolding crisis.