- FTSE 100 falls 58 points to 10,353
- Legal & General falls despite strong-looking results
- Energy prices still being closely watched
- UK average mortgage rate rises back over 5%
5.05pm: FTSE pares losses
The FTSE rallied from earlier session lows to finish Wednesday down 58 points at 10,353.
Chris Beauchamp, IG chief market analyst, said looming higher inflation was drawing investor focus. “Today’s US inflation data was out of date before it was even released. But stocks are already pricing in higher prices around the globe,” Beauchamp said.
“While oil prices have dominated attention, it is the global tussle for gas supplies that might be the real driver of the much-feared but so far absent second wave of inflation.”
4.04pm: FTSE down not far off 100 points
The FTSE 100, as we head into the final half hour of Wednesday trading, is close to its lowest levels of the day.
Legal & General remains the biggest loser, down 6.4%, followed by Smiths Group, Endeavour Mining, Fresnillo, ICG and Babcock International.
BP is top of the leaderboard, up 2.1%.
Next are Rentokil Initial, Shell and Hikma Pharmaceutical, with fewer than 20 companies in the index still in green.
3.39pm: Gas shipments
The resumption of Qatari LNG exports through the Strait of Hormuz could take “significantly longer than expected” if mines are deployed in the major shipping lane, experts told specialist energy news service Montel News.
Even if LNG production and exports were to resume quickly, Wael Abdel Moati, chief gas officer at the Organization of Arab Petroleum Exporting Countries, said the presence of naval mines in the Strait "would make the reopening of the waterway far more complex and gradual".
Restorating LNG supply to pre-conflict levels would be “challenging” and could take “significantly longer than expected”, he said, with shipping lanes needing to be secure enough for insurers and shipowners to regain confidence.
This comes after US Central Command said overnight that it had "eliminated" of Iran's 16 minelayers.
Derek Steel, managing director of security consultancy Chartsec, told Montel: “The US Navy would first need to complete its targeted strikes and destroy Iranian shore-based naval facilities, as well as collectively eliminate their short- to medium-range missile capabilities."
Steel, a former member of the UK SAS, said eut even once the conflict has abated and mines cleared, naval escorts would be required for vessels passing through the strait.
3.14pm: Strategy notes
There've been a couple of strategy notes from Citi today.
In one, strategists suggested that the worst of the oil price shock may be over, and they are putting money to work on that view for the second time in a week.
In a note pondering if it was "time to buy the dip", the bank's global macro team said they first started buying back into markets last week, arguing that oil price spikes caused by geopolitical crises tend to be violent but brief.
"The day the oil price peaks, risk bottoms," they told clients, adding that the crisis could "relatively easily be ended by the US administration, essentially by claiming victory and disengaging from the active conflict."
In the other note, focused on Europe, analysts covering all sectors were polled to see which would be most affected by a prolonged Middle East conflict hitting supply chains.
Most concerns were about mining, airlines, chemicals and parts of industrials as the areas most exposed to disrupted supply chains and higher input costs.
2.34pm: Revolut wins full UK banking licence
Revolut has been granted its full UK banking licence, following an 18-month 'mobilisation' stage after being granted preliminary approval by the regulator 18 months ago.
The fintech said the Prudential Regulation Authority has now lifted restrictions on its banking licence, allowing its UK bank to be launched.
Revolut Bank UK Ltd will now roll out new banking services for its 13 million UK customers, the company said, including retail and business current accounts in the coming weeks.
The process of rolling out current accounts will be gradual and begin "in a few days, starting with a small group and expanding over the coming weeks to ensure a smooth user experience".
2pm: Oracle lifts Nasdaq but Dow Jones falls
US markets have been uneven in early trade, with the Nasdaq up 0.5% and the S&P 500 edging 0.2% higher, while the Dow Jones fell 0.4% as gains in technology stocks offset weakness in more defensive names.
Gains on the S&P 500 were led by Oracle, surging more than 14% after its earnings beat overnight.
Fertiliser producers CF Industries and The Mosaic Company also rallied strongly due to read-across from shipping disruption int the Gulf.
On the Dow, the biggest fallers were consumer goods giant Procter & Gamble, paint maker Sherwin-Williams, heavy equipment group Caterpillar and retailer Home Depot.
1.26pm: Shell declares force majeure on Qatar LNG, report says
Shell has reportedly declared force majeure on LNG cargoes it buys from QatarEnergy and sells to its clients worldwide, according to a Reuters story citing three sources.
Qatar announced a production halt at a giant LNG facility last week and declared force majeure on LNG shipments.
Force majeure allows Shell to suspend contractual obligations to deliver LNG to its customers if events outside its control are preventing supply
Shell declined to comment, the report said, with its shares slightly above flat at the moment - one of just over a fifth of FTSE shares in green.
1pm: Airline shares buying and selling
Investors have been repositioning sharply across European airline stocks since the outbreak of Middle East hostilities, according to Citi positioning data.
The analysis shows that sector positioning has turned more negative over both the past week and month, with investors increasing short exposure in Wizz Air, easyJet and Air France-KLM, which Citi characterises as the most operationally and financially leveraged carriers and therefore most exposed to sustained fuel price pressure.
British Airways owner IAG has also seen a shift, with long positioning that had been particularly heavy now moving to a more balanced level as investors take profits or hedge against further volatility.
Ryanair has bucked the trend, with long positioning increasing over the past week as investors gravitate toward what Citi describes as the carrier best equipped to weather near-term geopolitical turmoil. This view, the bank said, is "widely and rightly held".
12.16am: Stocks remain depressed, wide array of commodities prices higher
Just over halfway through the Wednesday session, and European markets are broadly lower, with London's blue-chip index down 0.9%, in line with losses on the Continent, where Germany's DAX is worst affected, down 1.4%.
US futures are pointing to a subdued open, with Dow, S&P 500 and Nasdaq futures down 0.1-0.2%.
It's difficult for stocks to make any headway today, says market analyst Kathleen Brooks at XTB, with bonds up not far from their multi-month highs seen at the start of the week.
"Interest rate futures volatility is unpreceded, which has a knock on effect for business and household confidence, inflation expectations and the economy.
"It is no wonder that stocks are selling off once more," she says. "We are living through a period of high volatility right now."
The news that cargo ships in the Strait of Hormuz have been attacked is supporting the oil price, she says, with plans for a coordinated release of oil reserves may cushion some of the impact but only having a "limited effect" on prices so far, with Brent crude above $91 a barrel.
"The last time there was a coordinated release of strategic reserves, back in 2022, it did not have a dampening effect on the oil price, which kept rising."
She adds that if Gulf shipping routes continue to be unpassable, "then it won’t just be petrol prices at the pump that are going up. Key inputs like fertilizer, food and industrial inputs are also at risk", with the price of agricultural commodities having also risen sharply this month, with a near 20% increase in the price of cocoa, 5% increase for coffee and a 5% gain for wheat.
11.21am: Investor slashes stake in oil & gas producer
Harbour Energy shares are the biggest loser on the FTSE 350 this morning, after a major shareholder cut its stake in the oil and gas producer.
Potomac View Investments, an entity managed by EIG, placed 60 million shares with institutional investors at a price of 255p per share, down from the last close price of 283.4p.
At the end of last month, the shares hit a one-year high of 300p and EIG seems to have decided to cut exposure despite the spike in oil and gas prices, raising gross proceeds of £153 million.
The stock sold represented around 3.8% of Harbour Energy’s issued share capital, with Potomac’s holding in Harbour dropping to about 3.5%.
10.38am: Reeves on energy markets and potential support
Rachel Reeves says it is "too early" to say what sort or level of energy market support will be needed for businesses.
But, speaking to MPs on the Treasury committee, she said the UK is ready to release strategic oil reserves as part of a broader support effort to cope with elevated energy prices.
She said they "work going on in terms of business support" in the Treasury and the Department for Business and Trade.
"Nothing is off the table at this stage. We are looking at targeted support as well as broader measures but it is just too early to say what is needed."
She added that the UK is "willing to play its part in using those reserves to put downward pressure on oil pressures and make sure supply remains strong".
Warning that war in the Middle East will hit the UK economy, at this stage she says "it would be unwise to speculate on what the impact on inflation and interest rates would be".
But she said the UK is "now less reliant on international energy price movements than we were when Russia invaded Ukraine", attributing this to investing more in "homegrown, renewable energy, which is not subject to this price volatility because it’s purchased through contracts for difference".
"Over the next few years, we will even be more insulated as more of that renewable energy comes online, and as we build the, the infrastructure to better connect it to the grid. And that will be facilitated, of course, by the Planning and Infrastructure Act, which which was passed at the end of last year."
10.31am: Gulf update
An Middle East conflict update.
Saudi Arabia’s defence ministry confirmed today that it had intercepted a wave of seven drones heading towards a strategic oil field after Iran continued its fire on its Gulf neighbours' energy and air infrastructure.
Escalating tensions in the Gulf are increasingly disrupting shipping through the Strait of Hormuz, one of the world’s most critical oil transit routes.
A second vessel was struck by a projectile in the Strait of Hormuz, forcing its crew to evacuate after a fire broke out on board, according to the UK Maritime Trade Operations agency.
The incident follows an earlier attack on a container ship in the same waterway. The strait would normally see around 100 vessels a day entering or leaving the Gulf.
The US said it had destroyed 16 Iranian mine-laying vessels near the Strait yesterday.
10.04am: Market analysis
Some more analyst views on the market situation.
Yesterday's relief rally after comments from President Trump that the Iran war was close to ending has "proved as short-lived as a mayfly’s lifespan,” says Dan Coatsworth at AJ Bell.
"While investors have not returned to the panic mode seen at the start of the week, with extraordinary swings in the oil price and plunging market values, there is genuine trepidation."
He flags reports that Iran may be laying mines in the Strait of Hormuz, which "create fear of a worst-case scenario which could see disruption to the key shipping route extend even beyond the conflict itself", while mixed messaging from Washington has also muddied the waters.
Brent has ticked up to $92, with the dollar flat against the pound, gold is flat, but stocks are firmly in retreat.
Bryn Jones, head of fixed income at Rathbones, notes that UK government bonds have been more heavily impacted by recent market turbulence than European government bonds and US Treasuries.
"It has seemingly got worse since the start of the recent conflict. We had expected a rise in yields, but the moves have been aggressive. They took futures from two rate cuts to one rate hike in the space of a week, which is exceptional behaviour from a G7 government bond market.
"But then there have been exceptional events going on in Middle East. Then to see that rate hike disappear in the next few hours, back to ‘no change’ in rates – that’s a lot of volatility.”
Jones says he still sees longer-dated bonds as attractive, but fundamentals are "being questioned", with concerns that the UK will be impacted by the inflation caused by higher oil prices, adding to this negative loop.
"A long, protracted war will have a negative impact on longer term inflation, hence why we have seen yields rise. It is difficult to predict President Trump’s behaviours, comments and moves and this ‘Trump Bingo’ has been going on for a while.
"The front end has also seen some aggressive repricing. If you think the inflation fed through is not going to be that bad, and a conclusion to this trouble is forthcoming, then clearly there could be a lot of value."
9.36am: Mortgage rates rise above 5%
Mortgage rates in the UK have jumped back above 5% as lenders pull hundreds of products from the market amid volatile financial conditions.
According to Moneyfacts, the average two-year fixed mortgage rate has risen to 5.01%, up from 4.84% on Friday, while the average five-year fix has climbed to 5.09% from 4.96%. Both are now at their highest levels since mid-2025.
At the same time 472 mortgage deals have been withdrawn in the past 48 hours, about 6.5% of the market, leaving 7,164 products available.
Moneyfacts said the sudden retreat by lenders reflects rapidly rising swap rates and marks the biggest drop in mortgage availability since the turmoil following the September 2022 mini-Budget.
Adam French, head of consumer finance at Moneyfactscompare, said: "Recent days have been some of the most turbulent in the UK mortgage market since the aftermath of the September 2022 mini-Budget."
He said many of the withdrawn deals "are likely to return within the next few days and weeks as lenders adjust their pricing to higher rate expectations".
"It’s unwelcome news for borrowers, as the prospect of falling mortgage rates has quickly given way to rate rises. How far they could go is now heavily dependent on how global markets and inflation expectations evolve as conflict in the Middle East unfolds."
9.16am: FTSE and European stocks well down
The FTSE 100 extended its losses as the first hour of trading wore on, and has now plummeted 111 points to 10,301.
European markets are broadly lower, with Germany's DAX down 1.6%, with slightly smaller declines in Paris, Milan and Madrid.
Biggest fallers on the Euro Stoxx 600 include healthcare names, financials and defence stocks, with Legal & General, CVC Capital Partners, Rheinmetall and Saab retreating alongside declines in industrials such as Smiths Group and Sunbelt Rentals.
The energy market is a key focus, says market analyst Victoria Scholar at Interactive Investor, but oil prices are "relatively subdued so far", with Brent crude trading just shy of $90 a barrel.
"Even after Tuesday’s declines, Brent crude is still up around 45% so far this year, reflecting the Iran war and the geopolitical uncertainty," she notes.
Neil Wilson at Saxo says that yesterday’s relief rally on comments from Donald Trump about the Middle East war ending “very soon” has evaporated.
He says this reflects oil prices remaining volatile and risk sentiment fragile, with trading based on the headlines from the rapidly evolving conflict in the Middle East.
"We've seen selling pick up in pace through the first hour of trade in Europe, signalling risk is off today."
He highlights some confusion about whether the US had successfully escorted a ship through the Strait of Hormuz, which is currently all but closed to shipping.
"Secretary of Energy Chris Wright claimed the US Navy had successfully escorted a tanker through the Strait – a claim the White House quickly quashed, which caused oil prices to rise and faded some of the stock market’s rally yesterday."
US futures are flat this morning but Oracle’s earnings beat sent shares up almost 10% afterhours, which he says "should help feed into tech rotation".
8.27am: Why is L&G being sold?
Let's look at why L&G shares are leading the fallers despite that record buyback.
It was a "solid set of results, broadly in line with our estimates at the operating level," says analyst Andreas Van Embden at Peel Hunt.
However, he says a "higher-than-expected investment variances meant a 4% miss in NAV (including CSM)", in other words net asset value was lower than forecast due to a larger gap between assumed and actual returns on the group's investment portfolio.
Van Embden says the outlook remained positive, with L&G stating that it is on track to meet its targets, with guidance for core operating EPS growth at the top end of the 6-9% range in 2026, while retail and bulk annuities pipelines are healthy.
Abid Hussain at Panmure Liberum says: "Overall, the numbers look fine year-on-year but appear to have generally missed or be in line with expectations."
He adds: "The capital position remains strong with a Solvency II capital coverage of 203%, although a material miss versus expectations driven primarily by negative market movements."
8.15am: FTSE 100 opens steeply lower
The FTSE 100 has plunged 80 points in opening trades to just below 10,332, led by Legal & General.
Despite launching its largest ever share buyback, the life insurer's shares are down 5.7% in initial trading.
Looking at the index's largest 20 companies, all but one is in the red, with HSBC, Rolls, BAE, Barclays, Antofagasta and Stna CHart all down around 1% or more.
7.58am: Balfour Beatty ups buyback and dividend
Another buyback, this one from Balfour Beatty of £200 million, accompanied by a 12% hike to its full-year dividend as the construction and infrastructure group reported a fifth consecutive year of earnings growth and an order book swelling to record levels.
Underlying profit was up 16% to £293 million on revenue up 8% to £10.8 billion, with UK power transmission and US buildings demand the key growth drivers.
New chief executive Philip Hoare, who joined in September, said the group's capabilities and disciplined approach to risk provided "a powerful foundation for the future," and guided for further profitable growth in both 2026 and 2027.
7.44am: L&G launches largest buyback
Life insurer Legal & General has launched its largest-ever share buyback of £1.2 billion and said it is aiming to "accelerate momentum" after being "reshaped" in the last year or two.
Core operating profits rose 6% to £1.6 billion, in line with forecasts.
CEO Antonio Simões said L&G was "a sharper, more focused business" following a year of restructuring, and pointed to the buyback alongside guided dividend per share growth of 2% as evidence of confidence in the group's trajectory, with total planned shareholder returns of £2.4 billion over the next year and more than £5 billion targeted between 2025 and 2027.
"We are on track to achieve the financial targets set out in our strategy," he said, "our priority now is to accelerate this momentum, maintaining discipline and delivering enhanced shareholder returns."
7.25am: Oil prices rule the market mood
Oil prices have become the most important ingredient of market sentiment this week, says market analyst Ipek Ozkardeskaya at Swissquote.
Brent and WTI prices reversed their big rise again yesterday after the International Energy Agency (IEA) announced that it could release a record amount of strategic reserves.
Though the exact amount has not been disclosed yet, it will reportedly be more than the 182 million barrels released after Russia’s invasion of Ukraine in 2022.
"But that amount remains meagre compared with the roughly 45 million barrels that IEA/OECD countries consume every day. It would therefore be a temporary fix," says Ozkardeskaya.
"The announcement is helping keep oil prices in check this morning, but the Middle East is now pumping less oil – around 6% less – in reaction to the Iran war.
"The duration of the conflict will determine whether the spike in oil prices is over, or whether there is more to come.
"Oil prices have therefore become the most important ingredient of market sentiment.
"If the war ends and the worst – in terms of an energy price spike – is behind us, investors could return to a more constructive mode. But uncertainties loom, and there is a chance that the Iran war will not be done and dusted quickly.
"For now, thanks to cooling upside pressure in oil prices, investors are scaling back the early-week jump in inflation expectations, which is helping support equities and bonds.
"Market volatility is easing and the US dollar is giving back ground against most major currencies. But restoring confidence will take time and require supportive data. And by supportive data, I primarily mean reasonable inflation numbers in the weeks ahead."
Today brings US CPI, for instance, though this is backwards-looking for February, before any of the energy pressures of the past week and a half.
7.16am: FTSE 100 predicted to open lower
The FTSE 100 has been predicted to start around 18 points lower on Wednesday as the Iran conflict seemed to intensify overnight, though oil prices remained below recent highs.
Yesterday, the London index leapt almost 163 points to 10,412, rebounding from a steep fall at the start of the week.
US stocks were patchy and largely flat overnight, with the Dow Jones falling 34 points or 0.07% and the S&P 500 dropping 0.2%, while the Nasdaq Composite closed just one point above flat.
Asian markets are mixed this morning, with Japan’s Nikkei 225 up 1.4% and South Korea’s Kospi gaining 1.4%, while Hong Kong’s Hang Seng was little changed and India’s Sensex fell 1.1%.
Brent crude stands at $87.55 a barrel, with WTI at $83.58, both well below the $100-plus seen at the start of the week.