Stock prices in London closed lower on Wednesday as uncertainty around the length of the war in the Middle East persisted and fears of higher inflation loomed.
The FTSE 100 index closed down 58.47 points, 0.6%, at 10,353.77. The FTSE 250 ended down 110.93 points, 0.5%, at 22,381.34, and the AIM all-share closed down 5.19 points, 0.7%, at 773.61.
In European equities on Wednesday, the Cac 40 in Paris closed down 0.2%, while the Dax 40 in Frankfurt ended 1.4% lower.
The pound fell to 1.3410 US dollars on Wednesday afternoon from 1.3458 at the equities close on Tuesday. The euro stood lower at 1.1571 dollars from 1.1648.
Stocks came under pressure on Wednesday as Iran continued to target energy infrastructure and shipping in the conflict with the US and Israel.
The US warned Iranians that it considers civilian ports in the Strait of Hormuz to be legitimate targets, alleging the Tehran government was using the facilities for military operations.
“The Iranian regime is using civilian ports along the Strait of Hormuz to conduct military operations that threaten international shipping,” the US military said in a statement.
“Civilian ports used for military purposes lose protected status and become legitimate military targets under international law.”
Meanwhile, the International Energy Agency said its member countries would unlock 400 million barrels of oil from their reserves – the biggest such release ever – to ease the impact of the Middle East war.
“The oil market challenges we are facing are unprecedented in scale, therefore I am very glad that IEA member countries have responded with an emergency collective action of unprecedented size,” IEA executive director Fatih Birol said in a statement.
Brent oil was higher at 91.93 dollars a barrel on Wednesday afternoon from 87.92 late Tuesday.
Oil majors climbed on the FTSE 100 as Shell shares rose 2.0% and BP was up 2.9% and led the blue-chip index.
Stocks in New York were lower. The Dow Jones Industrial Average was down 0.8%, the S&P 500 index was 0.2% lower, and the Nasdaq Composite fell slightly.
The yield on the US 10-year Treasury widened to 4.21% on Wednesday from 4.11% on Tuesday. The yield on the US 30-year Treasury stretched to 4.85% from 4.75%.
Analysts said US inflation “remains too firm” for the Federal Reserve to provide more support to the labour market, as consumer price inflation was steady in February, though this is likely to change later in the year.
The Bureau of Labour Statistics said consumer prices grew 2.4% on-year last month, in line with expectations cited by FXStreet, and matching January’s increase.
Back in London, Legal & General shares fell the most on the FTSE 100 and were down 6.8%.
Mixed results took the shine off a record share buyback and showed there remains “more work to do”, analysts said.
The London-based insurer and asset manager said core operating profit rose 5.9% to £1.62 billion in 2025 from £1.53 billion in 2024, below £1.65 billion Visible Alpha consensus.
RBC Capital Markets said the miss was driven by a mix of weaker Institutional Retirement and Asset Management business, as well as slightly higher group debt costs.
The broker said the Asset Management miss is “particularly surprising” given the increase in consensus estimates in company complied consensus between December and March.
Solvency II net surplus generation rose to £1.26 billion from £1.20 billion, which JPMorgan said was 2% below consensus on an adjusted basis.
RBC said although core operating profit was only “marginally weaker” than expectations, Solvency II was a “significant” miss, while further asset write-downs in Asset Management contributed to a net income miss.
More positively, L&G said it will begin a £1.2 billion share buyback programme this week, the largest in its history and ahead of £1.1 billion consensus, as part of plans to return around £P2.4 billion to shareholders over the next year.
On the FTSE 250 index, Balfour Beatty led the way as shares jumped 8.9%.
The construction firm said its long-term outlook remained positive amid “strong visibility” from its order book, as it recommended a higher dividend amid a statutory pretax profit jump.
Balfour Beatty said pretax profit surged 51% to £323 million in 2025 from £214 million in 2024.
The company recommended a final dividend per share of 9.8 pence for 2025, up 13% from 8.7p in 2024. This would bring the total payout for 2025 to 14p, up 12% from 12.5p.
Hochschild Mining sank 7.2% after it reported significant revenue and profit growth for last year, as its increased dividend was lower than markets had expected.
The London-based gold and silver miner – which has projects in Argentina, Brazil and Peru – said revenue rose 25% to 1.18 billion dollars in 2025, from 947.7 million dollars in 2024.
Hochschild declared a final dividend of 5.00 US cents, more than doubled from 1.94 cents per share for 2024.
Gold fell to 5,172.30 dollars an ounce on Wednesday from 5,228.60 at Tuesday’s close.
The biggest risers on the FTSE 100 were BP, up 14.45p at 514.00p, Rentokil Initial, up 11.30p at 467.30p, Shell, up 63.50p at 3,244.00p, Hikma Pharmaceuticals, up 18.00p at 1,215.00p, and InterContinental Hotels Group, up 1.90p at 133.45p.
The biggest fallers on the FTSE 100 were Legal & General, down 17.50p at 241.00p, Smiths Group, down 118.00p at 2,482.00p, ICG, down 71.00p at 1,527.00p, Fresnillo, down 138.00p at 3,654.00p, and Endeavour Mining, down 172.00p at 4,616.00p.
On Thursday’s economic calendar are US weekly jobless figures, as well as trade balance and building permits data.
Thursday’s UK corporate calendar sees full-year results for savings, insurance and investments firm M&G and publisher Informa.