FTSE 100 struggles as Brent oil tops 100 dollars once more

The FTSE 100 closed lower on Wednesday as the oil price ticked higher amid uncertainty in the Middle East conflict.

The FTSE 100 closed down 21.63 points, 0.2%, at 10,476.46.

The FTSE 250 ended up just 0.29 of a point at 22,972.01, and the AIM All-Share fell just 0.31 of a point at 808.12.

US President Donald Trump said late on Tuesday he had pushed back the end of a two-week truce with Tehran following a request by Pakistani mediators.

But oil prices pushed back above 100 US dollars a barrel after Iran’s Revolutionary Guards said their naval forces had seized two container ships seeking to cross the blockaded Strait of Hormuz.

The BBC cited Iranian reports that stated the country has attacked three cargo ships in the Strait of Hormuz, capturing two.

Brent oil traded at 101.42 dollars a barrel on Wednesday afternoon, compared with 98.03 dollars at the time of the equities close in London on Tuesday.

David Morrison, senior market analyst at Trade Nation, said on one hand, the ceasefire extension could be viewed positively, giving another opportunity for talks to take place.

“But the delay also raises concerns that the conflict could drag on despite continued diplomatic efforts. The Trump administration should be worried that Tehran spurned the talks, even as the president spins it as a sign of Iran’s fractured leadership,” he added.

On Wednesday, Mr Trump told the New York Post “it’s possible” that a second round of peace talks with Iran could begin by Friday.

The newspaper said it was told by Pakistani officials that talks might be possible within the next “36 to 72 hours”.

When the Post put this to Mr Trump, the US president replied in a text message: “It’s possible! President DJT.”

In European equities on Wednesday, the CAC 40 in Paris ended down 1.0%, and the DAX 40 in Frankfurt fell 0.3%.

But the mood was brighter in New York.

The Dow Jones Industrial Average was up 0.8%, the S&P 500 was 0.9% higher, and the Nasdaq Composite gained 1.3%.

Boeing and Philip Morris were firmly in the green after earnings but AT&T fell back.

After the US market close, it is the turn of electric vehicle maker Tesla to post results, the first of the so-called Magnificent Seven to report for the March quarter.

The yield on the US 10-year Treasury trimmed to 4.29% on Wednesday compared with 4.30% on Tuesday.

The yield on the US 30-year Treasury narrowed to 4.89% from 4.91%.

The pound was little changed at 1.3506 dollars on Wednesday afternoon from 1.3507 dollars on Tuesday. Against the euro, sterling firmed to 1.1525 euros from 1.1498 euros.

UK inflation accelerated in March as higher fuel and heating oil prices pushed up transport and household costs.

According to data from the Office for National Statistics, headline Consumer Prices Index inflation rose to 3.3% in the year to March from 3.0% in February, in line with FXStreet-cited consensus.

Core CPI, which excludes energy, food, alcohol and tobacco, decelerated to growth of 3.1% to March on-year from 3.2% in the year to February.

The annual rate of services inflation rose to 4.5% on-year from 4.3%.

Analysts at Citi said the report landed “broadly as expected”.

“This fuel shock was sufficient to lift headline inflation meaningfully on the month, but remains narrow in scope and concentrated in energy-related components rather than signalling broader price pressure,” the bank said.

But analysts at Barclays said the focus will now switch to understanding how the increase in input prices will feed through into indirect and second-round price effects.

The figures come ahead of the Bank of England’s interest rate decision next week.

The central bank is widely expected to leave rates on hold, with the outlook less certain for the rest of the year.

The euro traded lower against the greenback, falling to 1.1722 dollars on Wednesday from 1.1747 dollars on Tuesday.

Against the yen, the dollar was trading slightly lower at 159.39 yen, down from 159.43 yen.

On the FTSE 100, Intertek rose 1.4% after it confirmed receipt of an improved takeover approach from EQT, following the rejection of an earlier bid.

The London-based assurance, inspection, product testing and certification company said EQT has lifted its offer to £54 per share in cash from £51.50 before.

Intertek said its board is now reviewing the revised proposal with advisers and will provide a further update in due course.

Aerospace stocks Melrose Industries and Rolls-Royce fell 6.1% and 3.5% amid the ongoing Middle East crisis.

JPMorgan believes the risks for the European civil aerospace sector are increasing, especially for the aero engine companies that generate most of their profits from the aftermarket.

“We see the biggest financial risks for MTU Aero Engines and Melrose; both companies already have depressed (free cash flow) as they deal with the financial impact of the GTF engine recall. We see the biggest valuation risks for Rolls-Royce and Safran,” the broker said in a research note.

Reckitt Benckiser was also in the doldrums, closing 4.6% lower, after first-quarter sales missed forecasts.

The Uxbridge-based consumer goods firm, which owns products such as Nurofen painkillers, Strepsils throat sweets and Dettol antiseptic, said net revenue fell 12% to £3.25 billion in the quarter to March from £3.68 billion a year prior, 1.9% below Visible Alpha consensus of £3.19 billion.

Revenue was hit by weak sales of cold and flu remedies and “ongoing challenges” in Europe, the FTSE 100 listing said.

AJ Bell investment director Russ Mould explained: “A weak cold and flu season might be good news for most of us but is a headache for Reckitt as it undermines sales of Lemsip and Strepsils.”

Mr Mould thinks chief executive Kris Licht is likely to come under “greater scrutiny”.

“Having been in situ for two-and-a-half years, Licht’s strategy to revive the group’s fortunes seemed to be gaining some traction in 2025, but recent events have intervened to damage the business,” he added.

Gold traded at 4,734.05 dollars an ounce on Wednesday, down from 4,744.11 dollars at the same time on Tuesday.

The biggest risers on the FTSE 100 were Glencore, up 13.9p at 563p, Rio Tinto, up 168p at 7,458p, Metlen Energy & Metals, up 0.72p at 33.82p, Bunzl, up 50p at 2,409p and Antofagasta, up 74.5p at 3,782.5p.

The biggest fallers on the FTSE 100 were Melrose Industries, down 32.4p at 500p, Reckitt Benckiser, down 226p at 4,692p, JD Sports Fashion, down 2.98p at 73.42p, Rolls-Royce, down 41.8p at 1,138.6p and IAG, down 13.2p at 378.9p.

Thursday’s global economic calendar has a slew of flash composite PMI reports including the UK at 0930 BST.

In the UK, public sector borrowing figures are also due, while in the US, weekly jobless claims numbers will be released.

Thursday’s local corporate calendar has full-year results from food retailer J Sainsbury and travel retailer WH Smith, plus trading statements from stock exchange operator and data provider London Stock Exchange Group, data and analytics provider Relx and real estate investment trust Segro.

Contributed by Alliance News