The FTSE 100 declined on Wednesday as investors assessed corporate earnings from major UK companies and awaited the government’s Budget announcement, with losses in GSK (LSE:GSK) and Unilever (LSE:ULVR) weighing on the benchmark index.
At 08:18 GMT, the FTSE 100 was down 0.30%, extending its decline from the previous session. European markets also traded lower, with Germany’s DAX falling 0.12% and France’s CAC 40 slipping 0.06%.
Sterling weakened 0.14% against the US dollar to $1.3288 as market participants considered the potential implications of the Budget for public finances, government borrowing and interest rates.
Elsewhere, oil prices advanced amid continuing uncertainty surrounding the conflict involving Iran, while gold prices declined.
GSK Shares Fall Despite Third-Quarter Earnings Beat
GSK (LSE:GSK) was the FTSE 100’s largest decliner during early trading, with its shares falling 4.3% despite reporting third-quarter results ahead of market expectations.
The pharmaceutical group reported core earnings per share of 54.6 pence, compared with the analyst consensus of 50.4 pence.
Quarterly revenue reached £8.89 billion, exceeding expectations of £8.84 billion.
The figures represented an earnings beat on both measures, although the company’s shares declined following the announcement.
The market reaction indicated that the better-than-expected results were insufficient to prevent selling pressure during the session.
The reported figures did not identify a specific factor behind the share price decline.
Unilever Declines 3.38% After Raising Volume Growth Outlook
Unilever (LSE:ULVR) also traded lower following its quarterly results, with shares falling 3.38%.
The consumer goods group reported underlying sales growth of 5.2%, exceeding the 4.8% anticipated by analysts.
Unilever also raised its volume growth forecast to at least 3%, reflecting an improvement in its expectations for underlying sales volumes.
Despite the stronger-than-expected sales performance and revised guidance, the company’s shares declined in early trading.
The falls in GSK and Unilever contributed to weakness in the FTSE 100, given their positions among the index’s major constituents.
UK Budget in Focus as Sterling Weakens
Investors were awaiting the UK Budget, with attention directed towards government spending, taxation and the outlook for public borrowing.
Sterling declined 0.14% against the dollar to $1.3288 during early trading.
Government bond markets were also in focus as investors assessed the potential implications of fiscal policy for borrowing costs.
ING analysts suggested that UK government bonds, known as gilts, could experience a “relief rally” if the Budget proved less disruptive than some market participants anticipated.
The bank referred to the possibility of a Budget “more boring than Burnham’s ambitions would imply.”
The comments reflected expectations surrounding the fiscal announcement rather than a confirmed market outcome.
Government Announces Changes to Gas Standing Charges
Finance Minister John Healey announced plans to remove standing charges on household gas bills, transferring the associated costs into usage-based charges.
According to the Treasury statement, the standing charges currently cost a typical household approximately £108 annually.
The proposed change would alter the structure of gas bills by shifting costs away from fixed daily charges and towards consumption.
Healey said:
“Gas standing charges are unfair and outdated so I am scrapping them to give millions of households a bit of breathing space.”
The announcement did not establish the overall financial impact on individual households, which would depend on gas consumption and the final structure of the revised charges.
The policy formed part of the domestic economic developments being assessed by investors ahead of the Budget.
Federal Reserve Decision Adds to Market Focus
Investors were also awaiting the US Federal Reserve’s monetary policy announcement, scheduled for 18:00 GMT.
The decision was another consideration for financial markets alongside the UK Budget and corporate earnings announcements.
US interest rate policy can influence global bond yields, currency markets and equity valuations.
Market participants were monitoring the Fed’s decision and any accompanying commentary for indications about the direction of monetary policy.
The combination of UK fiscal developments and US monetary policy contributed to the economic calendar facing investors on Wednesday.
Oil Prices Rise Amid Continuing Middle East Tensions
Oil prices advanced as markets assessed developments in the conflict involving Iran and the potential consequences for regional energy supplies.
Brent crude futures increased 1.4% to $110.91 per barrel, while US West Texas Intermediate futures gained 1.41% to $101.30 per barrel.
US President Donald Trump indicated that further military action against Iran remained possible when questioned by reporters about developments following the upcoming US midterm elections.
Asked whether the United States could attack Iran again, Trump said:
“I can’t tell you that, but anything is possible.”
He also described the timing of the conflict’s conclusion as “simply a question of when I want to end it.”
The remarks came as diplomatic activity continued across the region.
Saudi Arabian, Pakistani and Turkish officials met Iranian counterparts in Tehran on Monday as efforts to address the conflict continued.
Separately, Houthi forces claimed responsibility for a missile attack on Saudi Arabia’s Ras Tanura refinery on Tuesday.
Saudi authorities had not confirmed the reported attack at the time of the market update.
The unconfirmed claim added to uncertainty surrounding energy infrastructure and potential supply disruptions.
Israeli Political Developments Remain in Focus
Political developments in Israel also formed part of the broader regional situation.
Prime Minister Benjamin Netanyahu said the threat from Iran “is not over as long as the regime is still here.”
His comments came as Israeli election exit polls indicated a close contest between Netanyahu’s political bloc and that of opposition leader Gadi Eisenkot.
The election outcome remained uncertain on the basis of the reported exit polls.
Developments in Israel, Iran and neighbouring countries continued to influence assessments of regional security and energy supply risks.
Gold Prices Decline as Oil Advances
Gold prices moved lower during Wednesday’s trading session.
Gold futures declined 0.28% to $4,063.15 per ounce, while spot gold fell 0.25% to $4,050.41.
The declines contrasted with gains in crude oil prices.
Commodity markets were responding to a combination of geopolitical developments and the approaching US monetary policy decision.
The reported price movements reflected trading levels at the time of the market update and may have changed subsequently.
Standard Chartered Raises Full-Year Financial Targets
Among other UK-listed companies, Standard Chartered (LSE:STAN) raised its full-year income growth and profitability targets following better-than-expected third-quarter results.
The international banking group reported a 27% increase in pretax profit to $2.25 billion, exceeding analysts’ forecasts.
Growth in wealth management and trading income contributed to the quarterly performance.
Standard Chartered now expects full-year income growth to exceed its previous guidance range of 5% to 7%.
The bank also increased its return on tangible equity target to approximately 14%, compared with its previous objective of more than 12%.
The revised guidance followed growth across several business divisions, including wealth management.
Hunting Reduces 2026 Profit Forecast
Hunting (LSE:HTG) lowered its 2026 core profit forecast for the second time this year.
The energy services group cited the conflict in the Middle East, attacks in Saudi Arabia and a weaker near-term trading outlook.
The revised expectations reflected operating conditions affecting its markets and customers.
The company did not provide a revised numerical profit forecast in the reported market summary.
Hunting’s announcement added to the corporate developments being assessed by UK investors alongside earnings reports from larger FTSE-listed companies.
Outlook for UK Equities
The FTSE 100’s early decline reflected weakness in major index constituents as investors awaited the UK Budget and the Federal Reserve’s interest rate decision.
GSK and Unilever both reported quarterly results above market expectations, but their shares declined during the session.
Elsewhere, Standard Chartered raised its annual financial targets, while Hunting reduced its profit outlook.
Sterling weakened against the dollar, European equity markets edged lower and crude oil prices advanced amid continuing Middle East tensions.
The Budget announcement, Federal Reserve decision and subsequent developments in corporate earnings and energy markets remained the principal events being monitored during Wednesday’s trading session.
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