London’s FTSE 100 opened higher on Wednesday, lifted by overnight gains from Wall Street and a tentative ceasefire between Israel and Iran. It’s the second day in a row where markets have welcomed geopolitical calm, but the optimism in London continues to feel thin compared to the broad-based rally seen in the US.
The index rose 31.65 points to 8,790.64 at the open, a 0.4% gain that follows Tuesday’s flat finish. By comparison, US markets powered ahead on Tuesday – the Dow up 1.2%, the Nasdaq 1.4%. Global relief, it seems, registers more strongly across the Atlantic.
One of the morning’s standouts was Babcock International, which jumped over 10% after raising its medium-term outlook, hiking its dividend, and launching a £200 million share buyback, the first in its history. In an era where defence spending is on the rise, Babcock is positioning itself as a key beneficiary. Strong earnings, improved margins and a confident tone from management struck a chord with investors hungry for reliable growth.
While not a household name like Rolls-Royce or BAE, Babcock’s performance demonstrates a broader theme, companies exposed to defence and energy security are becoming more attractive, especially in an unstable geopolitical climate.
Away from defence, Warehouse REIT surged 6% after ditching a previous takeover offer from Blackstone in favour of a new bid from Tritax Big Box REIT. The cash-and-shares deal values Warehouse REIT at just over £485 million, slightly above Blackstone’s all-cash proposal. Tritax shares slipped on the news, but the move reflects ongoing interest in logistics property despite wider weakness in commercial real estate.
Mid-cap movers were active again. THG added 13% after reporting a return to revenue growth, while ProCook climbed 4.1% on stronger earnings. But it wasn’t all good news: Ultimate Products slumped 33% after warning on full-year profit, citing weaker margins and a soft order book, a reminder that not all retail names are finding their footing in this environment.
So once again, the FTSE’s early strength appears to be driven more by sentiment imported from abroad than by any structural shift in investor confidence toward the UK market. The same questions linger, lack of tech exposure, dependence on old-economy sectors, and a macro backdrop that continues to weigh on consumer and business sentiment alike.
FTSE 100 is reacting to events, not leading them.