London stocks slip as corporate updates flood in; oil rises on Iran report ahead of Fed
London stocks fell at the open on Wednesday as investors digested a deluge of corporate updates and looked ahead to earnings from four of the “Magnificent Seven” US tech giants, alongside a closely watched Federal Reserve policy decision. At 0840 BST, the FTSE 100 was down 0.4% at 10,291.59.
Oil prices firmed, with Brent crude up 1% at $112.34 a barrel following a report that US president Donald Trump has instructed aides to prepare for an extended naval blockade of Iran.
According to the Wall Street Journal, citing US officials, Trump is targeting Tehran’s finances in a bid to force a nuclear climbdown, and in recent meetings opted to keep squeezing Iran’s economy and oil exports by preventing shipping to and from its ports. Officials told the paper he judged that alternatives — resuming bombing or walking away from the conflict — carried more risk than maintaining the blockade.
“With the standoff over the Strait of Hormuz continuing and safe passage seemingly only guaranteed for luxury mega-yachts, rather than shipments relied on by many millions, it’s keeping worries about an energy crunch front and centre,” said Susannah Streeter, chief investment strategist at Wealth Club.
“The benchmark, Brent crude, is still hovering around the painful level of $111 a barrel, a three-week high, and the big worry is that as companies have to shoulder elevated bills for longer, they’ll have little choice but to pass on the costs through higher prices, while employees will clamour for higher wages as inflation rises.” Attention later turns to the US, where Alphabet, Microsoft, Amazon and Meta Platforms are slated to report.
“Given the outsized weighting of these companies in the index, and the enormous capital expenditure they have announced to build AI capabilities, these results will be closely watched by investors globally,” said Anna Macdonald, investment strategy director at Hargreaves Lansdown.
The Federal Reserve is widely expected to keep the policy rate at 3.50–3.75% later, while the Bank of England and the European Central Bank will announce their latest policy decisions on Thursday. In London, St James’s Place slumped after reporting a drop in first-quarter funds under management, citing a decline in global markets.
GSK fell despite above-forecast first-quarter profits, buoyed by robust demand for specialist HIV and oncology drugs. Panadol owner Haleon was lower as a mild cold and flu season weighed on first-quarter sales, though it reiterated full-year guidance. Lloyds Banking Group edged down even as it reaffirmed guidance and posted a better-than-expected 33% rise in first-quarter pre-tax profit to £2.0bn.
On the upside, DCC led gains on the FTSE 100 after markets blog Betaville suggested the company may have attracted takeover interest. Aston Martin jumped after holding guidance and saying first-quarter losses had narrowed, adding that the Iran war had so far not impacted earnings.
Elementis rallied as it backed full-year expectations and reported higher first-quarter profit and revenue, saying its “Elevate Elementis” strategy is delivering ahead of plan.