Share prices in London closed lower on Wednesday as uncertainty persisted over the duration of the war in the Middle East and fears of higher inflation loomed.
The FTSE 100 index closed down 58.47 points, or 0.6%, at 10,353.77. The FTSE 250 closed down 110.93 points, or 0.5%, at 22,381.34, and the AIM closed down 5.19 points, or 0.7%, at 773.61.
In European stocks on Wednesday, the Cac 40 in Paris closed down 0.2%, while the Dax 40 in Frankfurt closed down 1.4%.
The pound fell to 1.3410 US dollars on Wednesday afternoon from 1.3458 at the close of trading on Tuesday. The euro fell to $1.1571 from $1.1648.
Stocks were under pressure on Wednesday as Iran continued to attack energy infrastructure and shipping in the conflict with the United States and Israel.
The United States warned the Iranians that it considers civilian ports in the Strait of Hormuz as legitimate targets, alleging that the government in Tehran 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 their protected status and become legitimate military objectives under international law.”
Meanwhile, the International Energy Agency said its member countries would release 400 million barrels of oil from their reserves – the largest such release ever – to ease the impact of the war in the Middle East.
“The oil market challenges we face are of unprecedented scale, therefore I am very pleased that IEA member countries have responded with collective emergency action of unprecedented size,” IEA Executive Director Fatih Birol said in a statement.
Brent oil rose Wednesday afternoon to $91.93 a barrel from $87.92 Tuesday afternoon.
Oil majors rose on the FTSE 100 as Shell shares rose 2.0% and BP rose 2.9% to lead the blue-chip index.
Stocks in New York were down. The Dow Jones Industrial Average was down 0.8%, the S&P 500 index was down 0.2% and the Nasdaq Composite fell slightly.
The 10-year US Treasury yield widened to 4.21% on Wednesday from 4.11% on Tuesday. The 30-year US Treasury yield stretched from 4.75% to 4.85%.
Analysts said US inflation “remains too firm” for the Federal Reserve to provide further support to the labor market, as consumer price inflation remained stable in February, although this is likely to change later in the year.
The Bureau of Labor Statistics said consumer prices grew 2.4% year-over-year last month, in line with expectations cited by FXStreet and matching January's increase.
Back in London, Legal & General shares were the biggest fallers on the FTSE 100, falling 6.8%.
The mixed results took the shine off a record share buyback and showed there was still “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 the £1.65 billion Visible Alpha consensus.
RBC Capital Markets said the failure was due to a mix of weaker Institutional Retirement and Asset Management businesses, as well as slightly higher group debt costs.
The brokerage said Asset Management's error is “particularly surprising” given the rise in consensus estimates as companies met consensus between December and March.
Solvency II net surplus generation rose to £1.26 billion from £1.2 billion, which JPMorgan said was 2% below consensus on an adjusted basis.
RBC said that although core operating profit was only “marginally weaker” than expectations, Solvency II was a “significant” failure, while further asset write-downs at Asset Management contributed to a failure in net income.
More positively, L&G said it will begin a £1.2bn share buyback program this week, the largest in its history and ahead of the £1.1bn consensus, as part of plans to return around £2.4bn to shareholders over the next year.
On the FTSE 250 index, Balfour Beatty led the way with its shares rising 8.9%.
The construction company said its long-term outlook remained positive amid “strong visibility” into its order book, as it recommended a higher dividend amid a statutory rise in pre-tax profits.
Balfour Beatty said pre-tax profits rose 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 8.7 pence in 2024. This would take the total payout for 2025 to 14 pence, up 12% from 12.5 pence.
Hochschild Mining sank 7.2% after reporting strong revenue and profit growth over the past year as its biggest dividend was lower than markets expected.
The London-based gold and silver miner, which has projects in Argentina, Brazil and Peru, said its revenue rose 25% to $1.18 billion in 2025, from $947.7 million in 2024.
Hochschild declared a final dividend of 5.00 US cents, more than double the 1.94 cents per share for 2024.
Gold fell to $5,172.30 an ounce on Wednesday from $5,228.60 at Tuesday's close.
The biggest risers on the FTSE 100 were BP, up 14.45p to 514.00p. 1.90p to 133.45p.
The biggest fallers on the FTSE 100 were Legal & General, down 17.50p to 241.00p, Smiths Group, down 118.00p to 2,482.00p, ICG, down 71.00p to 1,527.00p, Fresnillo, down 138.00p to 3,654.00 pence, and Endeavor Mining. fell 172.00p to 4,616.00p.
On Thursday's economic calendar are weekly US unemployment numbers, as well as trade balance and construction permits data.
Thursday's UK corporate calendar includes annual results from savings, insurance and investment firm M&G and publisher Informa.
