FTSE 100 Slips as Global Markets Extend Selloff Amid Rising Volatility

The FTSE 100 is set to open lower, following a wave of global market declines that began earlier in the week. The index, which tracks the 100 largest companies listed on the London Stock Exchange, faces downward pressure as equities across Europe and the US trade in negative territory. The selloff has been driven by a combination of geopolitical tensions and shifting energy dynamics, contributing to a broader risk-off sentiment. The VIX index, often referred to as the 'fear gauge,' surged to 28.6 by mid-morning, up from 19.3 just 48 hours prior, signaling increased options-based volatility. Traders are adjusting positions amid rising concerns over energy supply stability and potential disruptions in global trade routes. Meanwhile, crude oil futures (CL=F) dropped 3.8% to $72.10 per barrel, reflecting softening demand expectations and renewed caution in commodity markets. The defense sector, a key component of the FTSE 100, has seen notable weakness, with shares of major players like BAE Systems and Rolls-Royce declining by 4.2% and 5.7% respectively. These moves suggest that even traditionally defensive sectors are not immune to systemic pressures. Energy firms, including BP and Shell, also posted losses of 3.1% and 2.9%, respectively, amid the oil price slump. Market participants are now closely monitoring central bank signals and upcoming economic data for clues on the trajectory of monetary policy. The combination of elevated volatility, declining equities, and falling commodity prices has prompted portfolio rebalancing across institutional and retail investor accounts.