London midday: FTSE stays down as oil edges up; L&G results disappoint

(Sharecast News) - London stocks were still in the red by midday on Wednesday as worries about the Iran conflict continued to rattle markets, with oil prices rising again. The FTSE 100 was down 0.8% at 10,330.60.

Oil prices edged up on reports that three vessels had been hit by "projectiles" in the Strait of Hormuz, with Iran said to be laying mines in the key waterway. Brent crude was up 4.2% at $91.48 a barrel and West Texas Intermediate was 4% higher at $86.83.

Crude prices had fallen overnight on a report that the International Energy Agency was proposing the largest release of oil reserves in its history to stop the cost of oil surging as a result of constrained supply from the region.

According to the Wall Street Journal, citing unnamed sources, the IEA's plan to unlock reserves would exceed the 182m barrels of oil that IEA member countries put onto the market in two releases in 2022 when Russia launched its full-scale invasion of Ukraine.

A separate report from Reuters suggested that the IEA is planning to release 400m barrels of oil.

In a further development on Wednesday, the G7 group of nations said they supported, in principle, the implementation of proactive measures to address the situation, including the use of strategic reserves.

Dan Coatsworth, head of markets at AJ Bell, said: "The relief rally which took hold after comments from Donald Trump that the Iran war was close to ending has proved as short-lived as a mayfly's lifespan.

"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.

"Reports Iran may be laying mines in the Strait of Hormuz create fear of a worst-case scenario which could see disruption to the key shipping route extend even beyond the conflict itself. Messaging from the US administration has also muddied the waters on initial claims the fighting is almost over.

"Oil has ticked up again, the dollar is higher which has helped put gold back under pressure, and stocks are back in retreat.

"The FTSE 100 has not given back all of yesterday's gains but it's clear there is appetite for some certainty on how and when the situation in the Middle East might be resolved.

"The release of strategic oil reserves being mooted by G7 countries could help in the short term but ultimately an end to the conflict or at least a clear path to de-escalation is what's needed to fully address the market's concern."

Geopolitics aside, investors were eying the release of the US consumer price index for February at 1230 GMT.

Joshua Mahony, chief market analyst at Scope Markets, said: "Looking ahead, markets are getting a fresh look at US inflation today, with the latest CPI data arriving just as energy gains push inflation expectations higher. Since energy only accounts for about 6% of the total CPI, it usually takes indirect pressure- like rising food costs - to trigger a significant spike in the headline number. While this specific release doesn't yet account for the most recent energy volatility, a higher-than-anticipated print would be concerning, especially if elevated energy prices persist.

"The dip since Monday's surge to $120 has kept the hope of two rate cuts alive, although those odds appear to be fading by the day. For markets, any additional inflation concerns are likely to provide a tailwind for the dollar, dampening support for US equities and gold."

In equity markets, Smiths Group was hit by a downgrade to 'neutral' from 'outperform' at BNP Paribas.

Legal & General slumped as it announced its biggest ever share buyback and said it was on track to hit its financial targets, but full-year core operating profit came in a touch light.

Full-year core operating profit rose 6% to £1.62bn, versus consensus expectations of £1.65bn, while core operating earnings per share increased 9% to 20.93p, in line with the guidance given at the half-year results.

Dan Coatsworth said: "Legal & General failed to hit market forecasts for profit growth in 2025, causing the shares to weaken and seeing £750 million wiped off its market value.

"Core operating profit of £1.62 billion was marginally below the £1.65 billion forecast, which overshadowed the launch of its largest ever share buyback. The earnings miss is unfortunate but not catastrophic. Most investors own this story for the juicy dividends and they're still flowing like fine wine on a summer's day."

Harbour Energy tanked after its third-largest shareholder, EIG Management, sold 60m shares in a placing to institutional investors, raising about £153m.

4Imprint tumbled after results, as it said tariff-related costs may influence revenue and margins in 2026,

Hochschild Mining was also weaker even as it reported a rise in annual earnings as geopolitical turmoil boosted precious metals prices.

On the upside, Balfour Beatty rallied after it posted a jump in full-year profits, driven by strong performances in UK construction and support services.

Construction materials group Breedon racked up strong gains as it hailed another year of revenue and EBITDA growth and a record cash performance.

Market Movers

FTSE 100 (UKX) 10,330.60 -0.78% FTSE 250 (MCX) 22,363.85 -0.57% techMARK (TASX) 5,833.35 -0.63%

FTSE 100 - Risers

Pershing Square Holdings Ltd NPV (PSH) 4,298.00p 1.51% InterContinental Hotels Group (IHG) 133.35p 1.33% Hikma Pharmaceuticals (HIK) 1,227.00p 1.24% Flutter Entertainment (DI) (FLTR) 8,026.00p 1.06% BP (BP.) 505.00p 0.99% 3i Group (III) 2,958.00p 0.99% Rentokil Initial (RTO) 459.90p 0.81% Severn Trent (SVT) 3,112.00p 0.71% Shell (SHEL) 3,204.00p 0.69% Pearson (PSON) 982.60p 0.63%

FTSE 100 - Fallers

Smiths Group (SMIN) 2,432.00p -6.61% Legal & General Group (LGEN) 242.80p -5.88% Airtel Africa (AAF) 334.00p -3.86% St James's Place (STJ) 1,292.00p -3.01% Rolls-Royce Holdings (RR.) 1,275.00p -2.67% ICG (ICG) 1,557.00p -2.57% Babcock International Group (BAB) 1,383.00p -2.33% BAE Systems (BA.) 2,193.00p -2.32% Melrose Industries (MRO) 525.20p -2.16% Diploma (DPLM) 5,115.00p -2.11%

FTSE 250 - Risers

Balfour Beatty (BBY) 745.00p 6.91% Breedon Group (BREE) 334.80p 3.98% Vietnam Enterprise Investments (DI) (VEIL) 753.00p 2.59% Schroder Oriental Income Fund Ltd. (SOI) 376.00p 2.25% Raspberry PI Holdings (RPI) 304.30p 1.81% Bodycote (BOY) 720.00p 1.62% Pantheon Infrastructure (PINT) 115.50p 1.32% VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 465.00p 1.31% Pacific Horizon Inv Trust (PHI) 935.00p 1.19% Shawbrook Group (SHAW) 400.50p 1.14%

FTSE 250 - Fallers

Harbour Energy (HBR) 260.00p -8.94% 4Imprint Group (FOUR) 3,520.00p -8.93% Energean (ENOG) 851.50p -3.76% Pan African Resources (PAF) 155.00p -3.61% TP Icap Group (TCAP) 251.00p -3.28% QinetiQ Group (QQ.) 497.40p -3.23% Clarkson (CKN) 4,505.00p -3.12% Oxford Nanopore Technologies (ONT) 117.20p -3.06% Avon Technologies (AVON) 1,852.00p -2.94% Close Brothers Group (CBG) 429.40p -2.93%