London midday: FTSE maintains gains as oil creeps higher again; Fed eyed

(Sharecast News) - London stocks were still in the black by midday on Wednesday, but oil prices were already beginning to creep higher again, as investors continued to eye on developments in the Middle East ahead of the latest policy announcement from the Federal Reserve.

The FTSE 100 was 0.3% firmer at 10,431.59. Brent crude was up 0.7% at $104.16 a barrel, while West Texas Intermediate was 1.3% lower at $94.99.

Brent crude had fallen earlier on reports that Iraq had resumed crude exports to Turkey's Ceyhan port, as the Middle East producer looks to bypass the stricken Strait of Hormuz. According to multiple reports, crude is now being transported from Iraq's Kirkuk oil fields to Ceyhan via pipeline after Baghdad, the Kurdistan Regional Government and Ankara struck deals to enable flows to restart.

However, Iraq's oil production still remains well below normal levels. Prior to the outbreak of war, Iraq was producing around 4.5m barrels of crude per day, but export issues forced it to curtail output.

According to Reuters, citing unnamed officials from the North Oil Company, Iraq is seeking to pump at least 100,000 barrels per day of crude through to Ceyhan, while the Iraqi state news agency has said pumping has resumed at a rate of 250,000 barrels.

Emma Wall, chief investment strategist at Hargreaves Lansdown, said: "The oil price has softened - though Brent still trades above $100 - thanks to two pieces of news; a select few tankers are moving through the key Strait of Hormuz and Iraq has agreed a pipeline deal to export oil via Turkey.

"A reminder that in normalised trade, 20% of daily oil and 25% of liquified gas flows through Hormuz; this activity is a fraction of that. But it does mark an improvement on last week, where the Strait was effectively shut. Iran is reportedly allowing only those tankers operated by countries considered neutral, or anti-US in this conflict, such as China.

"While any relief rally is welcome, investors should be mindful that volatility is likely to continue over the next month, through extreme daily moves become less likely as markets look to longer-term indicators. Policy - both monetary and foreign - is key. Oil futures remain elevated compared to pre-conflict, with 6-month prices near $80. This is a key indicator of remaining risk to economic growth and consumer confidence."

As far as the Fed is concerned, it's widely expected to keep the funds rate at 3.50% to 3.75%. Wall said what has the potential to upset markets is what chair Jerome Powell says at his penultimate press conference - how the vote was split and any commentary on the war, forward guidance implications.

"The markets have flipped from expecting two cuts this year pre-Iran conflict, to one hike after the escalations, to now one cut is the consensus view, later in the year," she said. "The Fed will also share its Outlook-at-Risk report, published monthly, which gives details of risks to unemployment, inflation and economic growth. Expect oil prices to dominate."

In equity markets, Diploma rocketed as it hiked full-year guidance on the back of robust first-half trading. The industrial group now expects annual organic revenue growth of 9% and an operating margin of 25%. It had previously forecast 6% growth in revenues and a 22.5% margin.

Trading remained "very strong", it noted, making it confident for the second half.

Moonpig rallied as it announced a new �65m share buyback and said full-year growth in adjusted earnings per share was set to be at the top end of its guidance of 8% to 12%.

Softcat surged as it lifted its full-year guidance following an "exceptional" first half. The company, which provides IT infrastructure products and services, now expects high single-digit growth in underlying operating profit for FY 2026, up from low single-digit previously.

The upgrade came as it reported a 27.3% increase in underlying operating profit to �93.8m for the six months to the end of January, and a 33% jump in gross invoiced income to �2bn.

Mining giant BHP nudged up as it announced that Brandon Craig will take over as chief executive officer on 1 July, succeeding current CEO Mike Henry, who will step down after six and a half years in the role. Craig currently serves as BHP's president of the Americas.

On the downside, insurer Prudential fell, giving up earlier gains even as it lifted its dividend and reported double-digit full-year profit growth. In the year to the end of December 2025, new business profit rose 12% to $2.78bn, while the total dividend for the year was 26.60cents per share, up 15% on the prior year.

Unilever lost ground following a Bloomberg report late on Tuesday that it's in the early stages of considering a spinoff of its food assets as it looks for ways to further streamline its portfolio.

Ithaca Energy also fell after saying it swung to a full-year loss.