Market Overview

The FTSE 100 was down 0.08% at 09:00 ET (13:00 GMT), having recovered sharply from an earlier decline after a softer‑than‑expected U.S. inflation reading. Germany’s DAX fell 0.52% and France’s CAC 40 edged up 0.10%.

Currency and Commodity Movements

Sterling traded 0.29% higher at $1.3430 and later firmed to $1.3424 against the dollar. Brent crude eased to $84.99 a barrel, marginally below Tuesday’s near‑$86 one‑month high, while U.S. WTI traded around $79.69. Gold rose to $4,070.50 an ounce, reversing its earlier dip, and spot gold edged up to $4,069.60 an ounce.

U.S. Inflation and Producer Prices

Core U.S. Producer Price Index (PPI), excluding food and energy, rose 4.7% year‑on‑year in June, a modest 0.2% increase from May. Headline PPI decelerated to 5.5% annually, with energy prices down 6.4% month‑on‑month. UBS said the softer inflation backdrop should ease concerns over further monetary tightening and allow investors to look through geopolitical volatility, supporting expectations of a more dovish Federal Reserve.

Political and Geopolitical Context

UBS analysts observed that the UK’s political transition under incoming Prime Minister Andy Burnham has so far had a muted impact on markets, reflecting his commitment to existing fiscal rules. The broker expects fiscal restraint to support sterling and short‑ to medium‑duration UK government bonds, while maintaining a neutral view on UK equities given the FTSE 100’s global earnings exposure.

U.S. Central Command reported a new wave of strikes on Iran on Wednesday morning, following a seven‑hour barrage the previous night – the fourth consecutive night of attacks. The strikes aimed to further degrade Iranian military capabilities used against commercial shipping in the Strait of Hormuz. Iranian state media confirmed strikes on the southern port city of Chabahar, about 200 miles east of the strait. Kuwait, Bahrain and Jordan reported incoming Iranian missile or drone attacks in retaliation. Iran’s health ministry said more than 260 people were wounded in the latest overnight barrage, and a government spokesperson said at least 30 people had been killed in recent days of U.S. attacks.

The European Union Aviation Safety Agency warned airlines to avoid the airspace of Bahrain, Kuwait, Qatar, the UAE and parts of the Gulf of Oman until at least 29 July, citing a high risk to civil flights at all altitudes.

Corporate Updates

  • B&M reported first‑quarter group revenue rose 2%, with strong growth in France and Heron Foods offsetting weaker like‑for‑like sales in its core UK business.
  • Barratt announced a £400 million share buyback for fiscal 2027 after delivering home completions at the upper end of its fiscal 2026 guidance.
  • Thames Water said it has sufficient funding through the fourth quarter of 2026 and continues to work on a recapitalisation plan with creditors, regulators and the government.
  • Rio Tinto reported first‑half copper‑equivalent production rose 3% year‑on‑year and maintained its full‑year production guidance across key commodities.
  • Antofagasta said first‑half copper production fell 9.5% year‑on‑year due to lower output at key mines but kept its full‑year production forecast.
  • Hunting maintained its full‑year EBITDA guidance after first‑half trading met expectations, supported by strong demand in its subsea and perforating businesses.
  • ICG reported a 10% year‑on‑year increase in fee‑earning assets under management, driven by strong fundraising for its flagship European structured capital fund.

Additional Remarks

U.S. President Donald Trump warned that strikes on Iranian power plants and bridges would begin “next week” unless Tehran returns to negotiations, telling Fox News, “We’re going to knock out all their power plants… unless they get to the table and negotiate.”