Late market roundup: FTSE 100 ends down amid Mideast escalations

Stocks in London ended lower on Wednesday, as the price of oil climbed, with tensions flaring in the Middle East as hostilities continued between Iran and the US.

The FTSE 100 closed down 41.21 points, 0.4%, at 10,332.30. The FTSE 250 ended down 192.07 points, 0.8%, at 23,186.29, while the AIM All-Share fell 11.08 points, 1.4%, to 807.24.

The Cboe UK 100 ended down 0.4% at 1,027.82, the Cboe UK 250 was 0.8% lower at 19,882.36, and the Cboe Small Companies Index ended down 0.8% at 18,759.53.

Oil prices climbed amid escalations in the Middle East, despite a purported ceasefire, with a drone strike on a passenger terminal in Kuwait’s international airport killing one person and wounding dozens of others.

‘Investors trimmed their exposure following reports of further hostilities between the US and Iran overnight. Iran was accused of launching drones and ballistic missiles at targets in Kuwait. But all were successfully intercepted and destroyed according to US Central Command,’ observed David Morrison, senior market analyst at Trade Nation.

‘The US military also carried out ’self-defence strikes’ on Iranian targets. All this suggests that the Strait of Hormuz won’t be opening anytime soon, and that is something of a worry for Europe, the UK and many Asian Pacific countries,’ he continued.

Brent crude for August delivery traded higher at $97.37 a barrel on Wednesday, up from $94.68 at the time of the equities close in London on Tuesday.

The Organisation for Economic Co-operation & Development warned that the war has hit economic growth prospects worldwide, with a more severe shock likely should no effective ceasefire be agreed before 2027.

Global economic growth is forecast to slip to 2.8% this year if Gulf energy exports return to pre-conflict levels in the third quarter, the group of 38 industrialised countries said in its quarterly update.

‘The longer the disruptions last, the larger the economic and social costs become,’ said OECD chief economist Stefano Scarpetta.

Many countries would risk falling into recession, he noted, and a drop in investment spending – ‘including in energy-intensive AI’ – would likely push up unemployment.

In European equity markets on Wednesday, the CAC 40 in Paris ended down 1.3%, and the DAX 40 in Frankfurt closed 1.3% lower.

In New York, the Dow Jones Industrial Average was down 0.7%, the S&P 500 was 0.5% lower, and the Nasdaq Composite dipped 0.7%.

Ahead of Friday’s US nonfarm payrolls, figures showed stronger-than-expected US private sector jobs data.

According to the ADP National Employment Report, private sector employment rose by 122,000 jobs in May, compared with an increase of 105,000 in April, which was revised down from 109,000. FXStreet-cited consensus had forecast a 117,000 rise.

In the UK, services sector activity slipped into contraction for the first time in more than a year.

The S&P Global UK services PMI business activity index fell to 49.3 points in May from 52.7 in April, dropping below 50 for the first time since April 2025. The reading was above the flash estimate of 47.9 but well below the long-run average of 54.2.

The broader S&P Global UK composite PMI output index fell to 49.7 points in May from 52.6 in April, and was below the 48.5 flash reading.

ING thinks a June interest rate rise now looks unlikely in the UK amid a fall in oil prices and weaker economic data. Yet a hike in July is possible if energy flows through the Strait of Hormuz don’t improve, it added.

The pound traded at $1.3435 on Wednesday afternoon, down from $1.3475 on Tuesday. Against the euro, sterling eased to €1.1574 from €1.1578 on Tuesday.

The yield on the US 10-year Treasury stretched to 4.49% on Wednesday from 4.45% on Tuesday. The yield on the US 30-year Treasury widened to 4.99% from 4.96%.

The euro traded lower against the greenback, at $1.1606 on Wednesday against $1.1638 on Tuesday. Against the yen, the dollar was trading at JP¥159.96, higher than JP¥159.89.

Gold traded at $4,443.05 an ounce on Wednesday, down from $4,503.10 on Tuesday.

On the FTSE 100, the oil price gains boosted oil majors BP and Shell, both up 1.7%, while a drop in metals prices weighed on miners Fresnillo, down 3.7%, and Anglo American, down 2.8%.

Miner Rio Tinto fell 2.8%, further hit by a downgrade to ’underperform’ by RBC Capital Markets.

On the FTSE 250, B&M European Value Retail soared 15% on hopes that its turnaround is gaining traction, despite reporting a hefty fall in annual profits.

The Jersey-based variety goods chain in the UK and France reported pretax profit of £227 million for the financial year that ended March 28, down 47% from £431 million the year before.

Adjusted earnings before interest, tax, depreciation and amortisation fell 26% to £459 million from £620 million, ahead of the £450 million Visible Alpha consensus, and in line with the midpoint of B&M’s lowered guidance of £440 million to £475 million.

Chief Executive Tjeerd Jegen said it was a ‘difficult’ year, with profits falling due to a ‘challenging market and execution issues’.

But WPP fell 5.1% as Goldman Sachs started coverage with a ’sell’ rating.

‘We see limited visibility on a return to healthy organic growth under the current asset mix. We could become more constructive if asset disposals were to lead to improved growth/free cash flow,’ the broker said in a research note.

boohoo soared 17% as it acclaimed a return to growth in the first quarter of its financial year, boosted by strong trading across Debenhams and PrettyLittleThing.

The Manchester-based online fashion retailer, which trades as Debenhams, said gross merchandise value rose 0.5% year-on-year in the first quarter to May 31, with May trading ‘particularly strong’ with GMV growth accelerating to around 8%.

Peel Hunt noted this is the first positive quarter in ‘several years’ and compared to a 30% drop in GMV in the prior financial year’s first quarter.

The biggest risers on the FTSE 100 were Bunzl, up 108.00p at 2,390.00p, SSE, up 80.00p at 2,336.00p, Howden Joinery, up 24.00p at 779.00p, Tesco, up 13.10p at 443.60p and J Sainsbury, up 8.30p at 304.60p.

The biggest fallers on the FTSE 100 were ICG, down 85.00p at 1,770.00p, Burberry Group, down 50.00p at 1,120.00p, Fresnillo, down 122.00p at 3,168.00p, Rio Tinto, down 236.00p at 8,072.00p and Anglo American, down 119.00p at 4,106.00p.

Thursday’s global economic calendar has a slew of construction PMI reports and US weekly initial jobless claims data.

Thursday’s local corporate calendar has full-year results from trading platform CMC Markets, outsourcer Mitie Group and life sciences company Ondine Biomedical.

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