UK equities traded in a narrow and volatile range on Wednesday as investors balanced improving conditions in the Middle East against a broad global sell-off in technology and semiconductor stocks, while also monitoring the political transition following Keir Starmer’s resignation.
By 07:25 GMT, the FTSE 100 was up 0.09%, having moved between modest gains and losses during the session. Elsewhere in Europe, Germany’s DAX fell 0.65%, while France’s CAC 40 added 0.20%. Sterling weakened 0.05% against the US dollar to $1.3188.
Political developments remained in focus in the UK. Starmer has continued discussions with expected successor Andy Burnham as part of a planned leadership handover and is due to meet European leaders in Berlin later in the day to discuss Ukraine, NATO defence spending and developments in Iran ahead of next month’s NATO summit.
Meanwhile, geopolitical tensions appeared to ease further as shipping activity through the Strait of Hormuz gradually returned towards normal levels. Tanker movements increased as concerns over disruption from the Iran-Israel conflict moderated, helping reduce pressure on energy markets.
The improvement followed comments from US officials rejecting suggestions that Iran could impose fees on vessels using the waterway. Diplomatic efforts continued throughout the region, although conflicting statements from Washington and Tehran highlighted the fragile nature of the current situation.
Energy markets reflected the calmer backdrop. Brent crude declined 1.22% to $75.86 per barrel, while West Texas Intermediate crude fell 1.35% to $72.22. Precious metals also weakened, with gold futures down 1.14% at $4,102 and spot gold falling 0.61% to $4,084 per ounce.
Technology stocks remained under pressure globally as investors reassessed valuations across the sector, contributing to a more cautious tone in equity markets despite the reduction in geopolitical risk.
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