Early market roundup: Stocks down as markets weigh US-Iran tensions

The FTSE 100 opened lower on Wednesday as weakness from mining stocks weighed, while oil remained near the USD85 mark following US President Donald Trump's threat to "knock out all [Iran's] power plants."

The FTSE 100 index opened down 63.97 points, 0.6%, at 10,468.16. The FTSE 250 was down 45.25 points, 0.2%, at 23,361.58, and the AIM all-share was down 1.87 points, 0.2%, at 763.71.

The Cboe UK 100 was down 0.5% at 1,039.18, the Cboe UK 250 was down 0.3% at 20,095.34, and the Cboe small companies was marginally lower at 18,496.08.

In European equities on Wednesday, the CAC 40 in Paris was down 0.4%, while the DAX 40 in Frankfurt was down 1.1%.

Tensions in the Middle East remained firmly in focus after US President Donald Trump threatened to intensify military action against Iran if Tehran failed to return to negotiations.

In an interview with Fox News, Trump warned that the US would target Iran's power plants and bridges next week unless the country resumed talks, as Washington and Tehran exchanged fire for a fourth consecutive day.

"Next week it gets really bad for them," Trump said. "We're going to knock out all their power plants. We're going to knock out all their bridges unless they get to the table and negotiate."

His comments came after the US reversed plans to impose a 20% charge on cargo passing through the Strait of Hormuz but continued its naval blockade of Iranian ports.

Oil prices extended recent gains on concerns over potential supply disruptions. Brent crude traded at USD85.16 a barrel at midday Wednesday, up from USD84.00 late Tuesday.

The pound was quoted at USD1.3402 at midday Wednesday, up from USD1.3396 at the London equities close on Tuesday. Against the euro, sterling rose to EUR1.1727 from EUR1.1709. The euro fell to USD1.1424 from USD1.1432, while the dollar strengthened to JPY162.27 from JPY161.96.

Back in London, mining stocks weighed on the FTSE 100.

Antofagasta was the worst-performing blue-chip, down 3.3%, after reaffirming its 2026 production guidance but reporting lower second-quarter output.

The Chile-focused copper producer said second-quarter copper production slipped 0.7% from the first quarter to 142,000 tonnes from 143,000 tonnes. Production was also down from 160,100 tonnes a year earlier, although the company described the quarter as "another consistent performance".

The weakness spread across the mining sector, with Fresnillo down 2.9% and Endeavour Mining losing 2.5%.

Leading the FTSE 100 was Barratt Redrow, up 2.9%, after announcing plans to return £400 million to shareholders during financial 2027.

The housebuilder intends to distribute £386 million through a share buyback programme and £14 million via dividends. The first £190 million tranche of the buyback will begin on Wednesday and be managed by Barclays through December.

Barratt Redrow also said adjusted pretax profit for financial 2026 is expected to be in line with market expectations. For financial 2027, it guided for between 17,700 and 18,200 home completions, including around 600 from joint ventures, based on an average of 415 active sales outlets.

ICG was the second-best FTSE 100 performer, rising 2.2%.

The alternative asset manager reported assets under management of USD126 billion at June 30, while fee-earning assets under management rose 10% year-on-year to USD88 billion. First-quarter fundraising totalled USD4.1 billion, with the company citing "strong traction from clients".

On the FTSE 250, B&M European Value Retail fell 4.3% after reporting first-quarter trading.

The discount retailer said group revenue increased 2.0% to £1.43 billion in the 13 weeks to June 27, or 1.7% at constant currency, supported by continued strength in France.

In the UK, however, revenue edged up just 0.3%, while like-for-like sales declined 2.3%, reflecting a slower start to the garden and outdoor season against a strong comparative period last year.

Chief Executive Tjeerd Jegen said: "Our first quarter is our seasonally most variable for sales, and the previously mentioned slower start to our garden season against a very strong comparable last year made this especially so in Q1. Against this backdrop, the like-for-like sales decline at B&M UK was expected."

He added that general merchandise returned to growth during May and June, garden inventory levels had normalised by the end of the season, and both France and Heron Foods continued to deliver positive sales growth.

Bloomsbury Publishing fell 3.3%, despite saying it expects to deliver record adjusted pretax profit in financial 2027, in line with market expectations.

The publisher said the upcoming HBO Harry Potter television series is expected to support performance. Current market consensus points to adjusted pretax profit of £49.9 million on revenue of £354.2 million.

Away from the stock market, troubled utility Thames Water reported a return to annual profitability but disclosed a further increase in its debt burden.

The UK's largest water supplier posted pretax profit of £226.4 million for the year ended March 31, swinging from a £1.65 billion loss a year earlier.

However, net debt rose to £19.77 billion from £17.73 billion as the company continued to borrow to fund capital investment.

Thames Water remains at the centre of efforts to secure a long-term rescue deal after Environment Secretary Emma Reynolds last month warned that proposals from creditors did not go far enough to protect customers or the environment.

In Asia on Wednesday, the Nikkei 225 in Tokyo closed up 1.5%. The Shanghai Composite fell 0.3%, while Hong Kong's Hang Seng rose 1.4%. Sydney's S&P/ASX 200 added 0.4%.

China's leading memory chipmaker is seeking to raise up to USD9.8 billion in an initial public offering as the country counts on homegrown hardware to boost its position in the artificial intelligence race.

ChangXin Memory Technologies (CXMT) wants to rival US giant Micron and South Korea's Samsung Electronics and SK Hynix in memory chips used in AI data centres.

The Anhui-based company said Tuesday it would raise at least CNY57.9 billion (USD8.6 billion) in a share sale and listing on the Shanghai Stock Exchange. That could rise to as much as CNY66.6 billion (USD9.8 billion) if its overallotment option is used.

It would mark China's largest mainland IPO since 2010, and its biggest ever mainland tech share sale – beating the CNY46.3 billion raised by Semiconductor Manufacturing International Corp in 2020.

In New York on Tuesday, the Dow Jones Industrial Average ended marginally higher, the S&P 500 rose 0.4%, and the Nasdaq Composite gained 0.9%.

The yield on the US 10-year Treasury widened to 4.60% from 4.56%, while the yield on the 30-year Treasury rose to 5.11% from 5.07%.

Gold traded at USD4,024.00 an ounce at midday Wednesday, down from USD4,085.44 late Tuesday.

Still to come on Wednesday's economic calendar, Ireland publishes trade balance figures.

In North America, investors will monitor US producer price inflation and the New York Empire State manufacturing index, alongside the Bank of Canada's interest rate decision and Canadian manufacturing sales and capacity utilisation data.

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