- FTSE 100 down 98 points at 10,305
- Oil in focus as prices ease then rebound hard
- Diploma surges to new high on upbeat trading update
5.15pm: War fears put stocks under pressure
Attacks on Iran’s gas field saw global stocks come under pressure on Wednesday, with the FTSE 100 closing down 98 points at 10,305.
“The rally had always been precarious given tonight’s Fed decision, but the market really doesn’t like seeing energy infrastructure directly targeted,” IG chief market analyst Chris Beauchamp said.
“Anxious traders now wait to see how Iran will respond to this fresh escalation, but with oil prices heading higher again a retest of the recent lows seems to be on the cards.”
4.12pm: A big down day
It's looking like a fairly big down day for London's blue-chip benchmark, down over 100 points, with some hefty falls for many of the index's largest names.
In the top 20, AstraZeneca, Rio Tinto, GSK and RTELX are down around 1-2%, while Unilever, BAT, National Grid and Compass are all down more than 3%.
Unilever fell after analysts raised eyebrows at reports that the consumer goods giant might spin off its food business.
The biggest fallers are Fresnillo, Metlen Energy & Metals and Endeavour Mining, as gold and silver prices tumble, in connection with rising inflation worries stemming from the spike in oil prices.
Top of the leaderboard remains Diploma, up almost 18% after its surprise profit upgrade.
Next are Weir Group, Babcock Int'l, Stan Chart, Halma, NBarclays, Spirax, IMI and Smiths Group, so a mixture of industrials linked to Diploma, and lenders with strong investment banking arms.
3.34pm: Microsoft and OpenAI rift reported
Worth flagging an interesting story away from the Middle East - a rift in one of the biggest partnerships in the tech sector.
Microsoft, which has bankrolled ChatGPT developer since 2023, is reportedly considering taking its partner to court.
The FT broke the story, with Microsoft apparently unhappy with a deal signed last month in which Amazon Web Services became the exclusive third-party cloud provider for Frontier, OpenAI's new enterprise platform for building and running AI agents.
Microsoft says the terms of their partnership require all access to OpenAI's models to be routed through Microsoft's Azure cloud platform.
The person close to Microsoft's thinking was not diplomatic: "We know our contract. We will sue them if they breach it. If Amazon and OpenAI want to take a bet on the creativity of their contractual lawyers, I would back us, not them."
2.47pm: Rate cut expectations rise
Stocks are getting stuffed. The FTSE is down 1.15%, the DAX is down 1% and the Dow Jones is down 0.9%
The spike in oil prices is, like it did when they went over $100 in the early days of the war, leading to a repricing of interest rate expectations, due to the likely effect on inflation.
US inflation numbers have been released, showing that there had been a higher-than-expected pickup even before the energy price shock from the Iran conflict.
The producer prices index, aka factory gate inflation, rose 0.7% in February, well above the consensus forecast of 0.3%. Core PPI increased 0.5% and the core ex-trade services index rose by 0.5%, above consensus which was 0.3% in both cases.
"The breadth of momentum in producer prices stands out in February’s report," says Sam Tombs at Pantheon Macroeconomics. "Hefty increases of 2.3% in energy and 2.4% in food prices boosted the headline, but there was strong momentum in core prices too, with core goods prices rising by 0.3% and core services ex-trade services prices rising by 0.5%."
That said, he notes that PPI data is generally more volatile than the CPI numbers, so this does not change his overall view that inflation pressures were stable before the oil price shock.
US Fed fund futures, however, are now indicating two rate hikes are expected by the end of the year.
Wild stuff *TRADERS FULLY PRICE TWO QUARTER-POINT ECB RATE HIKES IN 2026
— George Pearkes (@peark.es) March 18, 2026 at 2:35 PM
This has knocked the stuffing out of stocks.
"Stagflationary risks front and centre ahead of the Fed meeting," says market analyst Neil Wilson at Saxo, adding that markets are being shaken out of the "complacent mode" seen in the last three sessions.
As well as the "hot PPI" inflation, Wilson says, "we are looking at potential escalation in the Middle East as Iran and Israel are definitely seen targeting upstream production facilities for oil and nat gas".
Brent above $108 is the highest since the March 8/9th spike.
"The breach of this range is a material development within the market reaction to the conflict and is clearly a significant drag on risk sentiment.
"Dutch TTF gas also trades +7% at it highest since March 9th when it was coming down from a sharp spike higher."
2.12pm: Oil prices spike on Iran threats
Oil prices are continuing to rise, with Brent crude oil price now at $108.62 a barrel, up 5% on the day, and WTI up above $98.
Newswires are reporting that Gulf oil and gas producers were evacuating "multiple sites" after warnings of attacks from Iran.
Bloomberg says Iran warned countries around the Gulf that various energy industry sites are now "legitimate targets" after Israel attacked its giant South Pars gas field.
Facilities in Qatar, Saudi Arabia and the UAE are on a list of places at risk of missile strikes, Iran’s Tasnim news agency reported.
Attacks on Iran’s energy infrastructure “will not go unanswered,” the Fars news provider also reported.
1.55pm: Wall Street opens in red
US stocks have opened lower, confounding positive futures earlier.
The Dow Jones has started with a 0.4% drop, with the S&P 500 off 0.3% and the Nasdaq slipping 0.2%.
Biggest fallers on the Dow are Procter & Gamble, Coca Cola, Sherwin-Williams and Verizon.
Among the big tech names, Nvidia, Alphabet and Apple are flat, with the Mag 7 all slightly in the red.
1.16pm: Miners and consumer cyclicals drag Footsie lower
The FTSE 100 is continuing to sink lower.
Prudential is leading the way, with the biggest fallers in behind clustered in three groups.
Miners and commodity stocks are a big weight on the index, with Fresnillo, Endeavour, Metlen, Antofagasta, Anglo American and Rio Tinto – dragged lower by falling precious and base metals prices. Gold is down 1.5% and copper is down 3.1%.
Consumer staples are down, including Unilever, British American Tobacco, Coca-Cola Europacific and Reckitt, with Pru joined by other financials such as St James's Place.
12.57pm: Pru not quite perfect enough
Some analysis of the Prudential results, which have sent the shares down over 3%, after an early rise was wiped out.
Deutsche Bank analyst Kailesh Mistry highlights new business profit of $2.78 billion as 3% above his own estimate and 1% ahead of consensus, driven by stronger-than-expected performance in mainland China, with small beats in Hong Kong and Malaysia. Indonesia, Singapore and other markets missed his forecasts.
Nasib Ahmed at UBS said he expected "a small negative reaction, given positive positioning [ie the shares were well bought ahead of the results] with no upgrades to estimates today."
He flagged the free surplus ratio of 221% as the main soft spot, coming in below the consensus expectation of around 230%, driven by higher-than-guided required capital growth within Hong Kong's regulatory framework.
Both UBS and DB analysts broadly agree the results keep Prudential on track for its 2027 targets, with both maintaining their 'buy' ratings.
12.20pm: FTSE drops into red as oil prices hardens again
Just as the clock ticked past midday in London, the FTSE 100 started to tumble and has now dropped into the red.
Prudential is leading the fallers, down 3.4%, having started the day higher.
Unilever is down 2.6% as analysts caution that a move to spin off its foods business might not be the right thing to do just now.
Other fallers of more than 2% include Compass Group, RELX, Fresnillo, Endeavour Mining and BAT. All but three of the Footsie's 10 largest stocks are in the red too.
What's changed? Oil. Brent price are up at $1056.85 a barrel now, up 2.3% on the day.
Gains for US futures have also dropped in recent minutes too. The Dow Jones, S&P 500 and Nasdaq are all pointing to rises of around 0.1%, down from 0.3-0.4% before.
11.05am: Unilever foods exit talk "not helpful" right now
Barclays analyst Warren Ackerman says the reports that Unilever is weighing options for its Foods division is "not that helpful" at this particular time, arguing it will distract management at a time when delivering 2026 targets should be the priority.
The analyst is broadly unsurprised by the strategic logic, with Unilever having long signalled it wants to become a pure-play health, beauty and personal care company, but questions the timing.
"It will likely result in management being further inundated with questions on this topic at a time where executing this year needs to be front and centre, especially given the macro backdrop and geopolitics is getting even more challenged."
CEO Fernando Fernandez seems "more open minded" than his predecessor and has been less inclined to close down speculation" about the future of the foods business, which "perhaps explains why there has been some much written on this topic by analysts and media alike since he became CEO in March 2025".
The analyst warns against another drawn-out exit process along the lines of the Magnum ice cream sale, which he describes as an "18-month painful" distraction, when Fernandez should fix Knorr, build on Hellmann's success and complete the portfolio clean-up before even considering an exit from a position of greater strength.
10.08am: Investors embracing any good news they can
The reported deal between Iraq and Turkey to restart oil supplies has "helped to calm financial markets," says market analyst Russ Mould at AJ Bell and provide "relief to investors on the edge of their seats amid worries about disruptions to oil supplies".
Brent prices have inched back up to above $103.3 a barrel, essentially flat.
Getting the energy prices to move significantly lower depends on resolving issues around the Strait of Hormuz, says Mould.
"Investors are embracing any bit of good news they can, hence why markets pushed higher across Europe."
With this a big week for central banks and interest rates, he says the Middle East crisis "could put any monetary changes on ice.
"It’s a wait and see situation as policymakers get to grips with whether an inflation shock will be short lived or a long-lasting pain to fight."
9.50am: Is it right that markets are so calm?
Markets appear calm, almost sanguine, but major Middle East disruption risks a more severe global supply shock than Russia's invasion of Ukraine. .
Economist Kallum Pickering at Peel Hunt says he thinks the market calm reflects “an assumption that the war will be over soon” and that prolonged conflict is a “tail risk”.
Investors see the impact as “too serious to fully contemplate”, expecting US President Donald Trump to take “an off-ramp”. Given the TACO trade (Trump Always Chickens Out), that has some merit.
However, risks are rising, says Pickering, with only a “three- or four-week buffer” before widespread shortages emerge.
He warned that if markets reassess and see disruption as lasting longer, a “more aggressive sell-off could unfold” as supply shocks deepen and strain growth, inflation and financial conditions.
9.17am: Moonpig and Softcat jump
Top of the FTSE 250 risers are Moonpig Group and Softcat.
Online card seller Moonpig is up 7.2% after a year-end statement suggesting that trading was in line with expectations and that full-year targets are intact.
"Moonpig's core trading has been strong, staying up in the high single digits," says Peel Hunt analyst Jonathan Pritchard.
Netherlands-focused Greetz has been "solid", and Experiences have "shown a bit of recovery".
The plans for a further £65 million share buyback "was expected, but its announcement is a nod to management's confidence".
Softcat is also up over 7%, with its shares having fallen over 40% between last summer and this month.
The IT infrastructure reseller has posted bumper first-half results and upgrading its full-year profit guidance, citing surging corporate demand for AI-ready infrastructure.
Peel Hunt's Damindu Jayaweera says all the key financials were ahead of expectations, and "especially impressive given half of the large deal that was expected in 1H has slipped into 2H".
8.51am: Unilever to sell food brands?
Unilever is reported by Bloomberg and Dow Jones to be in the early stages of weighing a potential spin off of its food brands, including the likes of Marmite, Hellmann's and Knorr.
The report said the transaction would value Unilever’s food brands at tens of billions of dollars.
"Unilever is under pressure to streamline the business and focus on power brands given the underperformance of its share price over the past five years versus the FTSE 100 and other global consumer goods companies like Nestle and P&G," says market analyst Victoria Scholar at Interactive Investor.
"The hope is that Unilever can improve its outlook by shifting its focus more towards beauty and personal care where margins have historically been higher and there is less room for consumers to trade down to cheaper own-brand alternatives.
A food separation Unilever would follow the recent demerger of the Magnum Ice Cream Company and the sale of its spreads business in 2017-18.
"A broader move away from food might also appeal to investors given the rise in weight loss drugs that is creating a cloud of uncertainty in the food sector, particularly among unhealthier options, and looks set to reshape consumer demand in a way that is yet to be fully understood," says Scholar.
8.28am: Diploma's performance is 'exceptional'
The unscheduled trading update from Diploma is "exceptional", says analyst Sam Dindol at Stifel.
In the statement, the group reported strong first-half growth, with its Peerless Aerospace arm expected to deliver "outstanding" organic growth, while organic growth excluding the December 2024 acquisition were also strong and well ahead of the targeted 5% organic growth per year.
"Having delivered 14% organic growth in 1Q, the upgrade to organic growth guidance is not a complete surprise," says Dindol.
"We did not anticipate the scale of the upgrade to the operating margin guidance from c.22.5% to c.25%, and a key focus [of the conference call] will be where does the group see sustainable margins going forward."
8.15am: FTSE opens higher, led by Diploma, miners and airlines
The FTSE 100 has started higher, led by rebounding miners, airlines and housebuilders.
Top of the leaderboard is Diploma, up 16% to a new all-time high as the maker and distributor of specialist engineering parts upgraded its full-year profit forecast by around 13% above analyst expectations.
Next, come a trail of companies whose shares have been hit by the war in the Middle East, including miners Antofagasta and Anglo American, airlines IAG and easyJet, housebuilders Persimmon and Barratt Redrow.
7.59am: Moonpig notifies of new buyback
Moonpig has also announced plans for a new buyback, sending a short update notifying that it plans a further £65 million share buyback programme for its next financial year.
The online greetings card and gifting company reported trading in line with expectations for the year to April, with adjusted earnings per share growth to come in at the top end of its 8% to 12% guidance range for the year ending 30 April 2026, helped by strong cash generation and the benefit of existing buybacks.
Underlying profits (EBITDA) were said to be on track to grow by a mid-single digit percentage, with Moonpig's UK business delivering high single digit revenue growth.
7.31am: Pru tops up buyback and dividend after profitable year
Prudential has launched a $1.2 billion share buyback after posting double-digit profit growth for 2025, with another $1.3 billion eyed for 2027.
The full-year dividend was raised also 15% to 26.60 cents per share.
New business profit came in at $2.78 billion, just ahead of the City consensus of $2.75 billion, with margins at 42% also better than the 41% expected.
Chief executive Anil Wadhwani said: "Structural demand for our products in Asia and Africa continued to rise, driven by the increasing protection, retirement and wealth needs of our customers."
Looking ahead, he said: "our focus remains firmly on high‑quality, sustainable growth, disciplined capital allocation and delivering long‑term shareholder value. We carry the momentum of 2025 into 2026 and are confident in our double-digit growth trajectory across our key metrics, putting us firmly on track to achieve our 2027 financial objectives."
7.17am: FTSE 100 predicted to open higher as oil price softens
The FTSE 100 is predicted to continue bouncing back on Wednesday as oil prices soften slightly and markets wait to hear more central bank responses to the inflationary pressures emanating from the conflict in the Middle East.
London's blue-chip index is predicted to rise around 13 points, according to the futures market, after yesterday climbing 85.9 points to 10,403.6.
Overnight, US stocks also finished up for the day, with the tech-powered Nasdaq leading the way with a 0.5% gain, while the S&P 500 added 0.25% and the Dow Jones 0.1%.
Energy markets are still a key focus, with Brent crude easing 1.8% to $101.55 a barrel, seemingly on an arrangement for Iraq to resume oil exports through Turkey and the Kurdistan region to avoid the need to ship through the Strait of Hormuz, where traffic remains at almost a total standstill.
Prime Minister of the Kurdistan Region Masrour Barzani on the pipeline agreement https://t.co/fTYFJlno8Z
— Emma Graham (@themmagraham) March 18, 2026
There appears to be "a bit more calm in markets at the moment and a small hint that there is a decoupling from the price of oil", says Jim Reid, macro analyst at Deutsche Bank, noting that the past 24 hours have seen more positive risk markets and lower government bond yields in spite of Brent crude closing above $100 a barrel for a fourth consecutive session.
He says this comes amidst "hopes growing that the Fed and other central banks meeting this week wouldn’t sound too hawkish in response to recent developments".