The FTSE 100 pushed higher by Wednesday lunchtime, even as geopolitical tensions around Iran continued to dominate headlines and rattle sentiment.
Prime Minister Keir Starmer warned the ongoing conflict would “affect the future of our country”, though he insisted the UK is “well-placed” to deal with the fallout. He pointed to a longer-term plan aimed at steering the country towards a more secure footing, as concerns over the cost of living resurface.
Markets, for now, are looking past the rhetoric. The FTSE 100 rose 1.8% by midday, with the FTSE 250 up 1.7% and the AIM All-Share climbing 2.6%. Broader measures from Cboe echoed the move higher.
Defence and miners lead the charge
It was the usual names benefiting from geopolitical risk. Defence firms and precious metal miners did the heavy lifting.
Babcock International jumped 6.0%, while Rolls-Royce Holdings added 5.1%. Mining stocks followed closely, with Anglo American, Antofagasta, Endeavour Mining and Fresnillo all posting solid gains.
On the FTSE 250, Pan African Resources surged 7.3%, underlining the continued demand for gold exposure.
Oil prices eased slightly, with Brent crude falling back to $103.28 a barrel from $107.38 late Tuesday. Even so, energy markets remain on edge.
Property sector under pressure
Not everything joined the rally.
Berkeley Group Holdings slumped 15%, the worst performer on the FTSE 100. The housebuilder said it will stop buying new land and scale back development as the conflict and a weak economic backdrop weigh on housing demand.
The company is effectively stretching out its long-term strategy to preserve cash and manage risk.
Rightmove also struggled, down 5.8%, after confirming it will fight a £1.5 billion class action claim from estate agents over alleged excessive fees.
Airlines rebound, AIM hit by deal collapse
Airlines found some lift despite the backdrop. International Consolidated Airlines Group rose 4.5%, while Wizz Air and easyJet gained 5.3% and 3.7% respectively.
On AIM, it was a different story. Deltic Energy plunged 30% after a £7 million takeover by Viaro Energy fell apart due to regulatory delays.
Global picture remains fragile
Across the Atlantic, the Donald Trump is expected to deliver an update on Iran, saying earlier this week the US could “finish the job” within two weeks.
Reports of US-Israeli strikes hitting Iranian steel facilities have only added to the tension.
Closer to home, UK manufacturing showed signs of strain. The latest PMI reading slipped to 51.0 in March, with output falling for the first time in six months as uncertainty feeds through supply chains and business confidence.
In Europe, growth signals are mixed. Germany’s outlook has been downgraded sharply, with higher inflation linked to the conflict expected to drag on its economy. Meanwhile, eurozone manufacturing improved slightly, though supply delays persist.
Despite all this, US markets opened higher, suggesting investors are still willing to buy into the dip, at least for now.