The FTSE 100 didn’t crash this week. But there are still plenty of cheap shares on offer
The start of another war in the Middle East didnât lead to a market crash but for two members of the FTSE 100, their shares ended the week (6 March) considerably cheaper than when it started.
But does this mean these stocks are now in bargain territory? Or could there be worse to come? Letâs see.
Uncertain times
Since the start of hostilities, the FTSE 100âs fallen by nearly 5%. Although a full-blown crash has been avoided, the index is likely to fall further if there’s no quick resolution. And with thousands of people killed so far, we have to hope the conflict ends soon.
News reports have reminded us that the region produces around a third of the worldâs oil. And around 20% is transported though the Strait of Hormuz. Unsurprisingly, oil prices have risen nearly 10% to $80 a barrel during the past five days. But the US Navy has been deploying ships to the Gulf for weeks and the price of Brent crude has been steadily rising since the middle of January.
Out of favour
Two FTSE 100 stocks that have suffered more than most from the fallout are International Consolidated Airlines Group (LSE:IAG) — the owner of five airlines including British Airways — and easyJet.
Both have been hit by fears that rising jet fuel costs could damage earnings. In addition, there could be a significant loss of revenue. With most of its business concentrated in Europe, easyJetâs likely to have to cancel fewer flights. However, Türkiye is a popular destination for its package holiday business, and shares a land border with Iran.
In 2025, fuel costs and emission charges (â¬7.1bn) accounted for 25% of IAGâs total expenditure on operations. In 2023 — the last time jet fuel costs spiked — the figure was 29%. All other things being equal, an increase of four percentage points could cost the airline â¬1.1bn. For the year ended 30 September 2025, easyJetâs fuel spend (£2.3bn) was equal to 24% of headline costs.
To some extent, forward buying of jet fuel helps mitigate costs. But thereâs only so much that can be hedged. For example, at 24 February, 62% of International Consolidated Airlineâs estimated fuel requirement for 2026 had been locked in at a fixed price.
What next?
Qatarâs energy minister has told the Financial Times that if the situation persists, oil could hit $150 which, he said, would âbring down the economies of the worldâ. Given that thereâs no end in sight, I reckon there could be worse to come for the International Consolidated Airlines share price.
However, when the conflict ends, things could look very different. Although there are no guarantees, history shows that the stock usually recovers strongly from these types of events.
At the height of the pandemic in September 2020, following an emergency rights issue, the groupâs shares were changing hands for close to 100p. In March 2022, when energy prices soared after Russiaâs invasion of Ukraine, the stock was trading around 125p. Today (6 March), one share costs around 365p.
With its global brands capitalising on a strong desire to fly, the airlineâs proven to be remarkably resilient in recent years. Thatâs why I think itâs a stock to consider when current events â hopefully â start to calm down.
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More reading
- The IAG share price is climbing today despite war fears â whatâs going on?
- £1,000 now buys 264 shares in British Airways owner IAG. Worth it?
- Is todayâs volatility a once-in-a-decade chance to buy UK stocks?
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James Beard has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
