While stocks tumbled on Middle East tensions, UK investors were cashing in – here’s what they’re buying

Global stock markets took a sharp hit last week as escalating conflict in the Middle East sent shockwaves through financial markets.

Oil prices surged, airspace disruptions led to widespread flight cancellations, and investor sentiment soured amid fears of prolonged higher energy costs, inflation pressures, and potential interest rate stickiness.

Yet amid the broader sell-off, a notable group of investors appeared unfazed, or even opportunistic. UK DIY investors on the AJ Bell investment platform responded to the volatility not by heading for the exits, but by piling into the dips.

The group noted that there were twice as many buy trades as sells among its clients between 2 March and 6 March. Rather than panicking, many saw the market weakness as a chance to snap up quality assets at discounted prices.

“Dips and dividends were the key trends for AJ Bell DIY investors responding to Middle East conflict-driven market volatility last week,” the group said.

Airlines: Buying the dip on travel disruptors

The travel sector bore much of the brunt of theconflict. British Airways owner International Consolidated Airlines (IAG) saw its shares plunge 14.3% over the week, hammered by Middle East flight cancellations, detours around disrupted airspace, spiking oil (and thus fuel) prices, and worries about near-term passenger demand.

Despite the rout, or perhaps because of it, IAG emerged as one of the most bought stocks on the AJ Bell platform. EasyJet (EZJ) also ranked among the top purchases as its shares weakened.

AJ Bell suggested investors may have viewed the setback as temporary.

“Investors might have taken the view that IAG’s recent results showed a business in good health, and that it can bounce back from current setbacks,” the group said.

Housebuilders: Betting against prolonged high rates

Housebuilders faced their own pressures from fears that elevated inflation and interest rates could linger, squeezing mortgage affordability and demand.

Yet stocks like Vistry (VTY) and Taylor Wimpey (TW.) were among the most bought, even as the sector grappled with margin concerns and broader economic headwinds.

Investors appeared to be wagering that any rate relief or conflict resolution could spark a rebound in the housing market.

Dividends and defensives: Seeking income in uncertain times

Beyond “buying the dip,” many turned to income-generating assets less sensitive to market swings.

Investment trusts proved particularly popular:

• Greencoat UK Wind (UKW) drew strong interest, thanks to its hefty dividend yield (approaching 11%) and the logic that rising oil and gas costs could boost demand for renewables.

• Supermarket Income REIT (SUPR) appealed for its low correlation to broader markets – owning essential supermarket properties leased to giants like Tesco, Sainsbury’s, and Aldi – plus a solid 7.3% yield.

Meanwhile, some investors stuck to long-term plans, continuing to favor multi-asset funds from AJ Bell and Vanguard, as well as global equity tracker funds.

Not everything was in favor, however. Fundsmith Equity (the high-profile fund run by Terry Smith) saw net selling, as its underperformance in early 2026 continued to weigh on sentiment.

Now read: Britain’s biggest construction firm just delivered its strongest earnings growth in years – and the outlook is even brighter