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London’s FTSE 100 registered a sizeable stride by Wednesday afternoon, though its oil majors meant it underperformed against European peers that flew even higher as the US and Iran announced a ceasefire. ‘Make no mistake this is a pause in the proceedings and not a full resolution. That means any market rebound could quickly lose momentum unless there is clear progress with US and Iran talks,’ AJ Bell analyst Dan Coatsworth commented. ‘For now, investors are happy to take the glass half full perspective. They’re looking to play a shift in market sentiment and buy everything that’s been beaten up in recent weeks and sell what’s done well.’ That meant the FTSE 100 soared but failed to replicate the more sizeable gains delivered by European peers. London’s blue-chip benchmark surged 296.45 points, 2.9%, at 10,645.24. The FTSE 250 jumped 964.91 points, 4.5%, at 22,521.36, and the AIM all-share rallied 28.37 points, 3.8%, at 766.80. The Cboe UK 100 climbed 2.8% at 1,059.46, the Cboe UK 250 surged 4.8% at 19,571.16, while the Cboe small companies added 0.9% at 17,394.65. The CAC 40 in Paris jumped 4.6%, while Frankfurt’s DAX 40 skyrocketed 4.7%. Stocks that had provided investors with a port in the storm amid the conflict were on the decline on Wednesday, keeping the FTSE 100’s progress. Shell and BP tracked oil lower, falling 5.4% and 5.3%. British Gas owner Centrica fell 1.8% and tobacco companies Imperial Brands and BAT shed 0.9% and 1.4% amid a rotation out of defensive stocks. Over in Paris, oil major TotalEnergies, down 4.8% and index operator Euronext, 1.1% lower, were among only a handful of fallers. Both have risen during the conflict, with the former boosted by a loftier crude price. But barrel of Brent tumbled to $93.71 midday Wednesday from $110.24 at the time of the London equities close on Tuesday. Gold jumped to $4,787.85 an ounce from $4,645.77. In Frankfurt, gains were broad-based, though E.ON and RWE were on the decline, both down 0.4%, as utilities were left behind amid the rise in risk appetite. The yield on the 10-year US Treasury narrowed markedly to 4.24% midday Wednesday from 4.37% at the time of the London equities close. The 30-year yield slimmed to 4.85% from 4.95%. Sterling surged to $1.3434 from $1.3248 and rose to €1.1497 from €1.1447. The euro rallied to $1.1684 from $1.1573, while against the yen, the dollar declined to JP¥158.43 from JP¥159.91. Commerzbank analyst Michael Pfister commented: ‘Central bank expectations are also likely to be revised if the ceasefire proves sustainable and peace negotiations are successful. It is highly unlikely that the ECB or the Bank of England would deliver three or more interest rate hikes if the war were to end. For exchange rates, however, pricing in these expectations is unlikely to be all that relevant for now. Currencies have hardly reacted to the pricing in of these expectations after all, but rather to the respective country’s energy dependence. ‘Market participants should not be overly optimistic, however. Many details of the agreement remain unclear, particularly how transit through the Strait of Hormuz will be managed and how quickly energy shipments from the Middle East can resume. And the positions of the parties involved have recently diverged significantly, raising questions about the likelihood of the ceasefire lasting beyond two weeks, or indeed lasting two weeks at all. If the situation were to escalate again, today’s market reactions would likely reverse. For now, though, it’s time to take a deep breath - after all, the next crisis is unlikely to be far away.’ In New York, the Dow Jones Industrial Average is called up 2.6%, the S&P 500 up 2.7% and the Nasdaq Composite up 3.5%. BCA Research analyst Matt Gertken believes US President Trump may be wary of what a prolonged war means on the US political front. ‘The US-Iran ceasefire is a shaky two-week ceasefire but it tells us something important: Trump remains laser-focused on salvaging the Senate for Republicans in the midterms. As long as the election is not a foregone conclusion, the president has an incentive to tamp down the war and oil prices,’ Gertken commented. ‘Commodity prices, especially oil, have fallen but will now find a higher floor than before the war. Equities will benefit the most, especially international and cyclical stocks. US stocks will also perform well from a renewed interest in tech and a desire to hedge against any resumption of hostilities. Government bonds will benefit marginally from the temporary removal of an inflation risk, and from lower odds of central bank rate hikes. But they will still face above-target inflation and will underperform equities.’ Back in London, Close Brothers shot up 17%. It has reviewed the UK Financial Conduct Authority’s final motor finance verdict, putting the cost of the scheme at around £320 million. This is ‘broadly similar’ to its existing IAS 37 provision of £294 million. The £320 million can be ‘comfortably absorbed by existing capital resources, leaving the group well positioned to continue delivering its strategy’. ‘At this stage, no provision changes have been recognised. The group’s existing IAS 37 provision remains under review. The group will continue to closely monitor any further legal, regulatory and industry developments and is considering its next steps,’ it added. Vehicle retailer Motorpoint added 4.6%. It expects to report pretax profit of £7.5 million for the year ended March 31, surging 83% from £4.1 million. ‘Record retail volumes of 65,000 were achieved in FY26 and we continue to outperform the used car market. Our volumes grew 6.0% in the 2025 calendar year, compared to 2.2% for the overall used car market,’ it said. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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