London stocks slip as Middle East tensions pressure FTSE 100

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London stocks slip on Middle East tensions

Highlights

FTSE 100 declines 0.1% to 10,515.73 by 1013 GMT, pressured by heightened Middle East tensions and declines in precious metals miners dropping 2.3%.
B&M plunges 6.9% after reporting a 2.3% fall in first-quarter like-for-like UK sales, while Barratt Redrow rises 3.3% on a £400 million share buyback announcement.
Energy shares rise 0.3% as oil prices climb 2% on U.S. naval blockade of Iranian ports, while Watches of Switzerland jumps 4.8% following broker target price hikes.

Sector moves and market drivers

As reported by Reuters, London's FTSE 100 falls 0.1% to 10,515.73 points by 1013 GMT, while the FTSE 250 slips 0.09% as investors weigh the effect of worsening tensions in the Middle East.

Precious metals miners drop 2.3%, making the segment the weakest performer on the day. Fresnillo falls 2.8% and Endeavour Mining loses 2%, placing both among the biggest drags on the benchmark index.

Energy shares, by contrast, rise 0.3% as oil prices climb about 2%. The move follows U.S. President Donald Trump's reimposition of a naval blockade on all Iranian ports and a threat from Iran's Islamic Revolutionary Guard Corps to close other export corridors benefiting the U.S. and its allies.

The personal goods index gains 2.4%, the strongest sector advance, helped by a 4.8% jump in Watches of Switzerland Group after Barclays and UBS raise their target prices on the stock.

Corporate updates and UK economic backdrop

Rio Tinto adds 1.1% after the miner reports better-than-expected second-quarter iron ore sales, supported by strong operational performance.

B&M shares fall 6.9% after the discount retailer reports a 2.3% drop in first-quarter like-for-like sales in its core UK market, with a slow start to the gardening season weighing on trading. Growth in France, however, helps lift group revenue.

Barratt Redrow rises 3.3% after the housebuilder says it will return 400 million pounds, or $536 million, to shareholders through share buybacks instead of dividends.

The OECD says Britain must maintain fiscal discipline, address rising pension costs and tackle high energy prices to support economic growth, highlighting the pressures facing Andy Burnham, who is set to become prime minister next week. The market also follows a stronger close on Tuesday, when bank stocks gain after solid earnings from major U.S. lenders and softer-than-expected U.S. inflation supports expectations for a delay in interest rate cuts.

Our earlier article covered Barratt Redrow’s plan to return £400 million to shareholders, largely through a £386 million share buyback running through early July next year, alongside a small dividend. We also noted the move was driven by a sharply wider discount to net asset value and growing investor pressure, even as the builder pointed to cost inflation risks and a cautious outlook for UK housing demand.

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