Early market roundup: Stocks down as oil price up amid US-Iran tension

Blue chip stock indices in London, Paris and Frankfurt opened lower on Wednesday as oil prices rose, after the US revoked a general licence allowing sales of Iranian oil, and struck around 80 Iranian military targets.

The FTSE 100 index opened down 83.63 points, 0.8%, at 10,583.68. The FTSE 250 was down 150.50 points, 0.6%, at 23,228.68, and the AIM all-share was down 0.95 points, 0.1%, at 768.23.

The Cboe UK 100 was down 1.0% at 1,050.25, the Cboe UK 250 was down 0.7% at 20,007.38, and the Cboe small companies was down 0.2% at 18,393.18.

In European equities on Wednesday, the CAC 40 in Paris was down 0.9%, while the DAX 40 in Frankfurt was down 1.2%.

Markets turned risk-averse after the US and Iran exchanged fresh military strikes, raising fears that the fragile ceasefire between the two countries could unravel.

US Central Command said it had carried out "powerful strikes against Iran" on Tuesday evening after accusing Tehran of attacking three commercial vessels transiting the Strait of Hormuz this week, calling the incidents "a clear and dangerous violation" of the ceasefire.

The Pentagon later said US forces had struck around 80 Iranian military targets, hours after Washington revoked a general licence allowing sales of Iranian oil.

Oil prices responded to the renewed tensions. Brent crude traded at USD75.80 a barrel early Wednesday, up from USD73.88 late Tuesday.

Geopolitics also dominated the Nato summit in Ankara, where US President Donald Trump again questioned America's long-term military commitment to Europe.

Trump said he could withdraw all US troops from Europe and renewed calls for the US to take control of Greenland, remarks that threatened to reignite tensions with European allies.

Nato Secretary General Mark Rutte sought to reassure members, insisting the US remained "completely committed" to the alliance despite Trump's latest comments.

UK Prime Minister Keir Starmer said the gathering would prove to be "very important" against the background of the Ukraine war and the US conflict with Iran.

He said: "It's very important that, as leaders, we show the unity and the strength of Nato at a time like this, and that's what we'll do at this summit here this morning."

The pound was quoted at USD1.3365 early Wednesday, down from USD1.3376 at the London equities close on Tuesday. Against the euro, sterling slipped to EUR1.1691 from EUR1.1704. The euro traded at USD1.1427, unchanged from late Tuesday, while the dollar strengthened to JPY162.30 from JPY162.22.

Back in London, higher oil prices supported energy shares. BP led the FTSE 100, rising 2.1%, while Shell gained 0.9%. Even so, most blue-chip stocks traded in negative territory as broader market sentiment weakened.

Melrose Industries was the biggest faller in the FTSE 100, down 3.3%.

IG Group lost 1.9% after proposing to establish a new Jersey-incorporated holding company, subject to shareholder and regulatory approval, as part of a strategic review aimed at increasing financial and strategic flexibility while better reflecting its increasingly international operations. The company stressed its London Stock Exchange listing would remain unchanged.

The online trading platform also unveiled plans to simplify its organisational structure by combining its UK & Ireland, Europe and Asia-Pacific & Middle East commercial divisions into a single consumer business.

Separately, IG said first-half total revenue is expected to be around £643 million, up 18% year-on-year, or approximately £624 million on an organic basis, supported by a 107% increase in first trades and a 66% rise in active customers on a reported basis.

The company also announced Chief Financial Officer Tim Lawlor will step down following publication of interim results and completion of the chief executive review in October.

On the FTSE 250, Vistry Group slumped 7.1% after warning it expects to report a first-half pretax loss of around £30 million before any additional impact from Chief Executive Adam Daniels's strategic review.

The Kent-based housebuilder took around £50 million of one-off charges related to impairments and cash generation measures designed to reduce debt. It completed around 6,100 homes during the half, down from 6,889 a year earlier, while average private sales incentives increased sharply to 7.1% from 1.4%.

Zigup fell 8.1% despite reporting higher annual revenue and pretax profit, increasing its total dividend and expressing confidence in its outlook on the back of healthy rental demand.

Revenue for the year ended April 30 rose 2.6% to £1.86 billion, while pretax profit edged up to £102.0 million from £101.5 million. The vehicle rental company proposed a final dividend of 18.2 pence per share, lifting the total annual payout to 27.0p from 26.4p.

Among the gainers, RIT Capital Partners climbed 6.6% to the top of the FTSE 250 after announcing a tender offer for up to £300 million of shares at a 15% discount and reaffirming confidence in the long-term quality of its investment portfolio.

Jet2 advanced 9.6% after launching a £250 million share buyback despite reporting lower annual pretax profit.

The Leeds-based tour operator posted record annual revenue of £7.48 billion, up 4.3% from £7.17 billion, while pretax profit declined 7.1% to £551.0 million.

Chief Executive Officer Steve Heapy said: "We have been encouraged by performance for summer 2026 to date, despite the Middle East conflict leading customers to book closer to departure, a trend that is continuing across the peak summer period.

"Our London Gatwick operation is performing ahead of our initial expectations...given this encouraging start, we now expect to operate seven aircraft at Gatwick in Summer 2027."

In Asia on Wednesday, the Nikkei 225 index in Tokyo closed down 2.2%. In China, the Shanghai Composite ended 0.5% lower, while the Hang Seng index in Hong Kong closed 3.0% higher. The S&P/ASX 200 in Sydney closed down 0.2%

In the US on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.3%, the S&P 500 down 0.5% and the Nasdaq Composite down 1.2%.

The yield on the US 10-year Treasury was quoted at 4.55%, widening from 4.52%. The yield on the US 30-year Treasury was quoted at 5.01%, narrowing from 5.03%.

Gold was quoted at USD4,121.20 an ounce early Wednesday, down from USD4,144.14 on Tuesday.

Still to come on Wednesday's economic calendar are US wholesale inventories, EIA crude oil stocks and the minutes from the Federal Open Market Committee's latest meeting.

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