London midday: FTSE weak as investors eye US tech earnings, Fed

(Sharecast News) - London stocks were still weaker by midday Wednesday amid a raft of corporate news and ahead of key US tech earnings and a policy announcement from the Federal Reserve.

The FTSE 100 was down 0.6% at 10,273.79, while Brent crude was up 2.9% at $114.44 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 the regime's coffers in a high-risk bid to compel a nuclear capitulation Tehran has long refused.

It was understood that in recent meetings, including a Monday discussion in the Situation Room, Trump opted to continue squeezing Iran's economy and oil exports by preventing shipping to and from its ports.

Officials told the WSJ that Trump had assessed that his other options - resume bombing or walk away from the conflict - carried more risk than maintaining the blockade.

Joshua Mahony, chief market analyst at Scope Markets, said: "The perception that Iran will come to the table as the blockade threatens to shut-in and damage their energy infrastructure means the world finds itself stuck in a game of chicken to see who blinks first.

"However, a significant structural shift is emerging that could eventually break the price spiral: the UAE's shock decision to exit OPEC. By severing ties with the cartel, the Emirates are positioning themselves to pump unrestricted volumes, prioritising their own 'long-term strategic vision' over the collective production quotas of the Saudi-led group. With many facilities damaged in the region, the prospect of one nation ramping up output above pre-war levels does raise hope for a swift reversal in energy prices once the war is resolved.

"Notably, this move sees a continuation of OPEC's declining market share, with the group having gone from over 50% of the world's oil production to less than 30% once the UAE leaves. This weakens their ability to lift prices, with members seeing less benefit to their restricted output levels. The further this continues, the more likely we are to see other members leave the cartel."

Away from the Iran war, investors were eyeing results from four of the 'Magnificent Seven' across the pond, with Alphabet, Microsoft, Amazon and Meta Platforms all slated to report.

Anna Macdonald, investment strategy director at Hargreaves Lansdown, said: "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."

Meanwhile, 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 make their latest policy announcements on Thursday.

In equity markets, St James's Place slumped as it reported a drop in first-quarter funds under management, citing a decline in global markets.

Panadol owner Haleon lost ground as it said a poor cold and flu season had weighed on first-quarter sales, but reiterated full-year guidance.

GSK fell sharply despite posting above-forecast first-quarter profits, boosted by robust demand for its specialist HIV and oncology drugs. AstraZeneca nudged lower after its Q1 numbers.

RHI Magnesita fell as the refractory specialist held annual guidance despite slightly weaker demand for its products in the global steel market.

Lloyds Banking Group was down even as it lifted its full-year net interest income target and posted a better-than-expected 33% jump in first-quarter pre-tax profit to �2.0bn.

On the upside, DCC surged after the sales, marketing and support services group confirmed it has received a cash takeover proposal from Energy Capital Partners and KKR.

Ceres Power was the top performance on FTSE 250 after US peer Bloom Energy lifted its full-year revenue outlook as it reported record first-quarter earnings.

Luxury car maker Aston Martin shot higher after it held guidance and said first-quarter losses had narrowed, and that the Iran war had so far not impacted earnings.

Market Movers

FTSE 100 (UKX) 10,273.79 -0.57%

FTSE 250 (MCX) 22,418.81 0.09%

techMARK (TASX) 5,828.27 -0.69%

FTSE 100 - Risers

DCC (CDI) (DCC) 6,110.00p 13.94%

Smurfit Westrock (DI) (SWR) 3,006.00p 3.94%

Glencore (GLEN) 562.10p 2.01%

Anglo American (AAL) 3,568.50p 1.61%

Croda International (CRDA) 2,882.00p 1.59%

Mondi (MNDI) 747.00p 1.41%

Antofagasta (ANTO) 3,519.00p 1.00%

Weir Group (WEIR) 2,850.00p 0.99%

Babcock International Group (BAB) 1,106.00p 0.87%

Scottish Mortgage Inv Trust (SMT) 1,399.00p 0.83%

FTSE 100 - Fallers

St James's Place (STJ) 1,202.00p -3.99%

Haleon (HLN) 339.40p -3.36%

Next (NXT) 12,900.00p -3.30%

GSK (GSK) 1,965.50p -3.08%

Burberry Group (BRBY) 1,142.00p -2.51%

Land Securities Group (LAND) 580.50p -2.03%

BAE Systems (BA.) 2,006.50p -1.95%

Melrose Industries (MRO) 479.30p -1.90%

Persimmon (PSN) 1,054.50p -1.82%

Airtel Africa (AAF) 349.20p -1.69%

FTSE 250 - Risers

Ceres Power Holdings (CWR) 589.00p 18.27%

Aston Martin Lagonda Global Holdings (AML) 42.72p 6.96%

WPP (WPP) 267.60p 3.60%

Hays (HAS) 34.04p 3.59%

Breedon Group (BREE) 315.40p 3.01%

Tate & Lyle (TATE) 366.10p 2.89%

Raspberry PI Holdings (RPI) 570.50p 2.52%

Energean (ENOG) 879.50p 2.27%

Helios Towers (HTWS) 197.20p 2.18%

Oakley Capital Investments Limited (DI) (OCI) 486.00p 2.10%

FTSE 250 - Fallers

RHI Magnesita N.V. (DI) (RHIM) 2,575.00p -3.92%

THG (THG) 31.72p -3.22%

B&M European Value Retail (BME) 168.80p -2.99%

Grainger (GRI) 159.50p -2.68%

Ocado Group (OCDO) 196.35p -2.60%

Telecom Plus (TEP) 1,154.00p -2.03%

Howden Joinery Group (HWDN) 784.00p -1.88%

FirstGroup (FGP) 164.50p -1.67%

WH Smith (SMWH) 536.00p -1.56%

Kainos Group (KNOS) 828.00p -1.43%