UPDATE 1-UK's FTSE 100 hits over three-week low as banks, energy stocks sag

Updates after markets close

- Britain's blue-chip FTSE 100 hit its lowest since mid-May on Tuesday, bogged down by losses in heavyweight lenders HSBC and Standard Chartered, while energy giants also lost ground amid declining oil prices as investors monitored the Middle East conflict.

The blue-chip FTSE 100 index .FTSE closed 1.4% lower at 10,227.33 points, its weakest close since May 15. The midcap FTSE 250 .FTMC also shed 0.8%.

  • Heavyweight energy stocks .FTNMX601010 dropped 2.2% as crude oil prices slipped more than 3%. On Monday, Israel and Iran halted direct attacks on each other after an appeal by U.S. President Donald Trump.

  • Energy giant BP BP.L said company veteran Gordon Birrell will lead its upstream unit and Richard Harding will serve as interim head of downstream. Its shares closed 3% lower, tracking the drop in oil prices.

  • Asia-exposed lenders Standard Chartered STAN.L and HSBC HSBA.L slipped 6.3% and 4.4%, among the biggest drags on the blue-chip index.

  • JPMorgan analysts said in a note that the impact of China's new Outbound Direct Investment regulation would be more negative for UK, Asian and Swiss banks than previously expected.

  • Drugmaker GSK GSK.L lost 0.5% after agreeing to buy U.S.-listed cancer drug developer Nuvalent NUVL.O for $10.6 billion.

  • Venture capital firm Molten Ventures GROW.L gained 16.1% after announcing annual results. Fever-Tree Drinks FEVR.L gained 5.1% after the carbonated mixer supplier said it is confident of meeting full-year market expectations for revenue and core profit and announced an increase in share buybacks.

  • Inflation concerns, stemming from higher energy costs due to the Iran conflict, have had investors pricing in the likelihood of a 25 basis point interest rate hike by the Bank of England in September, according to LSEG-compiled data.