Sharecast - At 0900 BST, the FTSE 100 was down 1% at 7,509.66.
Susannah Streeter, head of money and markets at Hargreaves Lansdown (LON:HRGV), said: "A wary mood is spreading as the Middle East crisis looks increasingly intractable, while a high-interest rate environment looks set to stay for longer. President Biden has left Israel, having extracted a promise of aid for Gaza, but there are little signs of an easing in high tensions.
"Other diplomatic efforts will be closely watched, with the UK’s Prime Minister visiting Israel, and the foreign secretary meeting leaders in neighbouring countries, but a resolution still looks very difficult to achieve and concerns remain about the conflict potentially widening. Oil prices have dipped back after shooting higher yesterday but Brent is still trading above $90 dollars a barrel as supply concerns continue to swirl amid the Middle East turmoil.
"Investors are still heading for safe haven assets, like gold and the dollar, nervous about fresh volatility ahead. Amid a fresh sell-off in equities, gold prices are hovering around levels not seen since July, after jumping up over fears of an escalation of the Israel-Hamas conflict. The dollar has strengthened again as investors search for a place of relative safety to preserve their money."
Looking ahead to the rest of the day, investors were eyeing a speech by Federal Reserve chair Jerome Powell at the Economic Club of New York for any clues on the direction of monetary policy.
In equity markets, Rentokil Initial tumbled after saying that its full-year performance in North America was set to be "marginally below" its previous expectations, citing "near-term market uncertainty".
Mondi (LON:MNDI) slumped as the paper and packaging group said that challenging conditions continued into the third quarter, with demand "subdued" and profits much lower.
Rightmove (LON:RMV) was under the cosh after smaller rival OnTheMarket agreed to be taken over by US commercial real estate information group CoStar in a £99m deal.
In research written before the OnTheMarket takeover was confirmed, Citi said the news would be negative for Rightmove. The bank said it believed there had been some hope that Rightmove could be one of the M&A targets. It also noted that CoStar has firepower - $450m to $500m free cash flow per year - so Rightmove could face more intense competition in residential and other areas, especially given CoStar's strength in commercial.
Hargreaves Lansdown and Schroders (LON:SDR) both fell on the back of updates, while Close Brothers and ITV (LON:ITV) lost ground as they traded without entitlement to the dividend.
On the upside, AJ Bell rose as the investment platform delivered an impressive pre-close trading update, with customer numbers rising by 12% and net inflows surpassing the £4bn mark against what it called a "challenging market backdrop".
Hipgnosis gained as it announced a strategic review. Shares in the music rights owner fell sharply earlier this week after it scrapped its interim dividend in order to make sure it complies with its debt covenants, amid expectations of lower payments from its US catalogue.
Spire Healthcare also advanced as it announced the acquisition of Vita Health Group, a provider of mental and physical health services in the UK, for around .£74m in cash.
Market Movers
FTSE 100 (UKX) 7,509.66 -1.03%
FTSE 250 (MCX) 17,279.34 -0.71%
techMARK (TASX) 4,082.32 -0.96%
FTSE 100 - Risers
Admiral Group (LON:ADML) (ADM) 2,465.00p 1.40%
Endeavour Mining (EDV (LON:EDV)) 1,702.00p 1.07%
Weir Group (LON:WEIR) 1,780.00p 0.99%
Fresnillo (LON:FRES) 556.00p 0.54%
Antofagasta (LON:ANTO) 1,360.50p 0.48%
Diageo (LON:DGE) 3,112.00p 0.24%
Spirax-Sarco Engineering (SPX) 8,198.00p 0.12%
Sage Group (LON:SGE) 997.40p 0.10%
Reckitt Benckiser Group (RKT) 5,952.00p 0.03%
Convatec Group (CTEC (LON:CTEC)) 199.00p 0.00%
FTSE 100 - Fallers
Rentokil Initial (LON:RTO) 504.60p -15.16%
Rightmove (RMV) 510.60p -11.26%
Mondi (MNDI) 1,248.00p -6.38%
Hargreaves Lansdown (HL.) 693.80p -5.84%
Smith (DS) (SMDS) 268.90p -2.71%
Experian (EXPN) 2,635.00p -2.26%
CRH (CDI) (LON:CRH) 4,491.00p -2.16%
BAE Systems (LON:BAES) (BA.) 1,050.00p -2.10%
Schroders (SDR) 376.40p -2.06%
Smiths Group (LON:SMIN) 1,554.00p -2.02%
FTSE 250 - Risers
Direct Line Insurance Group (DLG) 161.40p 2.74%
AJ Bell (AJB) 259.60p 2.04%
Barr (A.G.) (BAG) 505.00p 1.92%
Kainos Group (LON:KNOS) 1,108.00p 1.65%
Hipgnosis Songs Fund Limited NPV (SONG) 74.10p 1.51%
Dr. Martens (DOCS) 117.60p 1.47%
Spire Healthcare Group (SPI) 219.00p 1.39%
888 Holdings (DI) (LON:888) 83.80p 1.33%
Aberforth Smaller Companies Trust (LON:ASL) 1,192.00p 1.19%
GCP Infrastructure Investments Ltd (GCP) 63.20p 1.12%
FTSE 250 - Fallers
Close Brothers Group (CBG) 776.50p -6.22%
Ceres Power Holdings (LON:CWR) 225.60p -4.41%
Petershill Partners (PHLL) 140.00p -3.98%
FDM Group (Holdings) (LON:FDM) 413.50p -3.39%
Centamin (DI) (LON:CEY) 82.45p -3.34%
Quilter (LON:QLT) 76.20p -3.18%
Hilton Food Group (HFG) 646.00p -3.15%
Tate & Lyle (TATE) 626.00p -2.95%
Travis Perkins (LON:TPK) 712.00p -2.65%
ITV (ITV) 64.78p -2.56%
