The FTSE 100 ended Wednesday on the back foot, falling 40 points to 8,718.75, a retreat that has become a familiar theme, early momentum fading as the session wore on. Even a sharp rally in Babcock International, which surged more than 10% on bullish results and its first-ever share buyback, wasn’t enough to keep the index afloat.
For much of the morning, London equities had followed the global risk-on mood. A ceasefire between Israel and Iran had lifted sentiment, while overnight gains on Wall Street and across Asia hinted at improving investor confidence. But later in the session, defensive names softened and cyclicals struggled to hold ground, dragging the FTSE 100 from a high of 8,792.43 back into negative territory.
Babcock was the biggest mover of the day. The defence and engineering firm impressed with a 52% jump in pretax profit, a dividend hike, and ambitious new margin targets. Its upbeat commentary about a “new era for defence” aligned neatly with NATO’s latest spending pledge, a 3.5% GDP commitment by 2035, which also lifted Rolls-Royce and BAE Systems modestly.
Yet beyond the defence trade, enthusiasm was limited. WPP dropped over 3% after being downgraded by Barclays, and energy and mining stocks lacked direction. The broader FTSE 250 also slipped, down 0.1%, as names like Moonpig and Tritax Big Box faltered.
There was better news for THG, up 13%, after a second-quarter update signalled a return to growth in its core Beauty and Nutrition divisions. Analysts suggested 2026 could be the company’s breakout year, a hopeful tone not often associated with a stock that has struggled to convince the market.
Warehouse REIT also popped higher, up 5.6%, after it agreed to a new £485 million takeover by Tritax Big Box, ditching a lower bid from Blackstone. Tritax, however, ended lower on the day.
Ultimate Products was the session’s cautionary tale, plunging 30% after warning that earnings would fall short of expectations, highlighting the margin pressure many UK retailers continue to face.
In the US, stocks were mixed at the time of London’s close. The Dow was slightly lower, the S&P 500 flat, and the Nasdaq up marginally, again suggesting tech-led resilience in contrast to the FTSE’s more value-oriented profile.
London’s main index continues to struggle for direction. A strong defence sector can’t hide the broader weaknesses, particularly when heavyweight names remain reactive rather than forward-looking. The FTSE’s lack of tech exposure remains an ongoing drag.