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UK markets ended the Monday trading session firmly in the red on Monday as escalating political tensions between the US and Iran led investors to strap on their tin hats as oil and gold prices spiked.
The controversial assassination of Iranian General Qasem Soleimani last week saw Brent crude oil futures jump around 3% on Friday, and they rose again on Monday to $68.87, their highest since September. The traditional safe haven of gold was also firmly up, rallying nearly 2% to $1,547.40.
The oil price spike inevitably pushed oil majors higher, with BP's more than 2% rise to 504.9p, topping the blue-chip leader board on Monday. BP's upstream earnings are directly impacted by the price of oil, so the higher oil prices rise, the further investors can expect its share price to rally.
Oil major peer Royal Dutch Shell was also in demand, although its 0.4% rise was less dramatic.
Private hospitals operator NMC Health, the target of a short selling attack before Christmas, continued to struggle to shrug off investor concerns, its 4.3% decline on Monday heading the FTSE 100 loser board.
But investors are evidently more worried about the prospect of reprisals by Iranian authorities the US. That was the major cause of the market's slump on Monday, with the benchmark FTSE 100 index plunging nearly nearly 60 points, or 0.75%, to close at 7,565.41.
Mid caps were also hammered, the FTSE 250 index slumping 0.9% to 21,791.62, albeit from recent 22,108 record highs.
CORPORATE NEWS OVERSHADOWED
Geo-political events overshadowed relatively thin corporate news from major companies, including drug giant AstraZeneca's approval for a hyperkalaemia drug in China.
AstraZeneca's shares fell 1.3% to £75.97.
The pharmaceuticals giant also announced the US Food and Drug Administration had accepted its application and granted priority review for a drug used to reduce the risk of cardiovascular death or heart failure.
Fellow drugs developer Dechra Pharmaceuticals has agreed terms to acquire the global rights to the Osurnia product portfolio from Elanco Animal Health in a $135m agreement.
The company said the addition would 'significantly enhance its presence in this key therapeutic area and complete its otitis externa service offering to veterinarians'.
Nevertheless, its share price slid 0.75% to £29.18, albeit recovering some of its earlier and heavier losses.
Insurance giant Prudential was another major stock to have its seemingly positive news overlooked. Shares in the Pru slipped 1.4% to £14.295 despite announcing a new partnership for insurance distribution in Vietnam.
Prudential's Vietnamese subsidiary, Prudential Vietnam Assurance Private Limited, has entered into a bancassurance partnership with Southeast Asia Commercial Joint Stock Bank (SeABank).
The exclusive agreement has a 20-year term and will become effective from April 2020.
Catering firm Compass was another faller on Monday, down around 1.6% at £18.59, after it announced that Paul Walsh would be stepping down as chairman to focus on his other business interests.
Walsh is to remain as chairman until his successor is appointed, the company said.
Providing a ray of light for mid cap investors was FTSE 250-listed Sirius Real Estate. It managed to end the session close on 1% higher at 90.9p, after it announced the acquisition of two business parks for a total of €33.4m.
The purchase price includes acquisition costs and reflects an aggregate EPRA net initial yield of 6.8%.
Online trading platform Plus500's shares manged to reverse earlier declines to close on Monday 0.8% to the good at 859.8p after it said it expected to report revenue of approximately $354m for the year ending 31 December 2019.
EBITDA for the year was expected to be approximately $190m after a much improved second half compared to the first half.
SMALL CAP WRAP
Oil junior Anglo African Oil & Gas has warned it may run out of money by February, although it said it was continuing to make progress to secure financing as it awaited proceeds from the sale of a stake in its Congo subsidiary.
But the news spooked investors, sending the stock plunging almost 22% to 0.45p by the close.
The company said it was in talks with RiverFort to provide financing by way of a convertible loan note, which was conditional on shareholders approving the disposal at the general meeting to be held on 13 January.
But mining minnow KEFI Minerals staged a near-20% rally after it said ANS Mining had completed its equity subscription in the company's Tulu Kapi gold project. The existing TKGM shareholders, KEFI and the Ethiopian Government, had also approved the issue of TKGM shares to ANS Mining.
Transfer of first tranche funding of $9.5m was expected to be completed in during January, KEFI said.