The FTSE 100 drifted lower on Wednesday as rising oil prices and renewed conflict signals between the US and Iran unsettled sentiment across global markets, with investors stepping back from risk as energy fears intensified.
London’s blue-chip index closed down 0.4% at 10,332.30, while the FTSE 250 dropped 0.8% to 23,186.29, reflecting weakness that was echoed across Europe and the United States as geopolitical concerns returned to the forefront of trading.
Crude oil moved sharply higher after reports of escalating hostilities in the Gulf region, including drone activity and missile threats linked to Iran and intercepted by US forces.
A drone strike on a passenger terminal at Kuwait International Airport, which killed one person and injured dozens, further underlined the fragility of the situation despite earlier suggestions of a ceasefire.
Brent crude futures rose to $97.37 a barrel from $94.68 at the time of the London close, with traders increasingly focused on the risk that key shipping routes, including the Strait of Hormuz, could remain disrupted for longer than previously assumed.
European equities followed London lower, with the CAC 40 in Paris and the DAX 40 in Frankfurt both finishing down 1.3%. In the US, markets also retreated, with the Dow Jones Industrial Average down 0.7%, the S&P 500 off 0.5% and the Nasdaq Composite slipping 0.7%.
On the FTSE 100, oil majors moved against the broader trend. BP and Shell each rose 1.7% as higher crude prices supported earnings expectations.
Miners came under pressure as weaker metals prices weighed on sentiment. Fresnillo fell 3.7%, Anglo American dropped 2.8%, and Rio Tinto also lost 2.8% after a downgrade to underperform from RBC Capital Markets added further pressure.
In the FTSE 250, B&M European Value Retail surged 15% after investors reacted positively to signs of operational progress, even as the company reported a sharp decline in annual profit.
Pretax profit fell 47% to £227 million, while adjusted EBITDA dropped 26% to £459 million, though this came in ahead of expectations. Chief executive Tjeerd Jegen described the period as difficult, citing a challenging trading environment and internal execution issues.
WPP fell 5.1% after Goldman Sachs initiated coverage with a sell rating, pointing to limited visibility on organic growth under the group’s current structure and suggesting improvement would depend on asset disposals translating into stronger cash flow and performance.
Online retailer boohoo surged, climbing around 20% after reporting a return to growth in its first quarter. Gross merchandise value rose 0.5% year on year to 31 May, with May trading notably stronger at around 8% growth. Analysts noted it marked the company’s first positive quarter in several years, following a steep decline in the prior period.
Overall, markets closed the session with energy strength unable to offset broader concerns over geopolitical risk and slowing global demand, leaving equities under pressure across regions.