The UK stock market moved modestly higher on Wednesday as investors focused on U.S. President Donald Trump travelling to Beijing for talks with Chinese President Xi Jinping, while continuing geopolitical tensions in the Middle East kept broader market sentiment cautious.
The FTSE 100 advanced 0.72%, while sterling edged slightly lower against the U.S. dollar to 1.3526. Elsewhere in Europe, Germany’s DAX gained 0.59% and France’s CAC 40 rose 0.25% as of 07:11 GMT.
Markets recovered some of the previous session’s losses as traders reacted positively to Trump’s high-profile diplomatic visit to Beijing, where discussions are expected to focus on trade relations and the ongoing Iran conflict. Trump is due to arrive later in the day accompanied by a delegation of senior executives, including Jensen Huang, who was reportedly added to the trip at the last minute.
Trump said he hopes to “open up China,” fuelling optimism that recent progress in U.S.-China trade discussions could continue after both countries agreed to consider extending a temporary arrangement over Chinese rare earth export restrictions.
The rebound in equities came despite stronger-than-expected U.S. inflation figures released on Tuesday, which had previously pressured global markets and highlighted mounting economic concerns linked to the Middle East conflict. Ongoing instability in the region has continued to disrupt shipping through the Strait of Hormuz, a strategically important route that carries around one-fifth of global oil supply.
Diplomatic negotiations over the conflict remain at an impasse. Trump warned Tehran on Tuesday that if Iran failed to accept U.S. terms, the United States would “finish the job.”
Iranian negotiator Mohammad Bagher Ghalibaf responded by saying Washington would face “nothing but one failure after another” unless it accepted Tehran’s 14-point proposal.
Trump dismissed Iran’s position as “TOTALLY UNACCEPTABLE.” Although neither side appears eager to return to full-scale conflict, the ceasefire remains fragile after more than two months of hostilities triggered by U.S.-Israeli strikes on Iran.
Ahead of the Beijing summit, Trump insisted China’s assistance on Iran was unnecessary, stating: “We have Iran very much under control.”
“We are either gonna make a deal or they will be decimated.”
Meanwhile, Beijing reiterated ahead of the talks that its determination to oppose Taiwanese independence remains “as firm as a rock.”
UK market roundup
BAB Babcock (LSE:BAB) warned that it expects a £140 million charge linked to its fixed-price Type 31 frigate contract, taking cumulative losses on the Royal Navy programme beyond £300 million, although the company maintained its fiscal 2027 guidance.
SVS Savills (LSE:SVS) said macroeconomic uncertainty related to the Middle East conflict is expected to delay and reduce advisory transactions as buyer and seller confidence weakens across the UK and regional property markets, though the company left its fiscal 2026 outlook unchanged.
BP. BP (LSE:BP.) announced the acquisition of a 40% interest in a production sharing agreement covering six oil and gas exploration blocks in Uzbekistan’s Ustyurt region.
VTY Vistry (LSE:VTY) warned that first-half profit will be significantly lower year-on-year as the company increases discounting to reduce inventory levels, pauses its share buyback programme and slows some construction activity amid rising costs and uncertainty tied to Middle East tensions.
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