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Blue chip stock indices were lower in London and Paris on early Wednesday afternoon amid fresh uncertainty regarding potential talks between the US and Iran; meanwhile investors await a US ADP jobs report for June. The FTSE 100 index was down 39.97 points, 0.4%, at 10,457.15. The FTSE 250 was up 77.18 points, 0.3%, at 23,090.63, and the AIM all-share was down 0.76 points, 0.1%, at 771.41. The Cboe UK 100 was down 0.5% at 1,036.94, the Cboe UK 250 was up 0.1% at 19,809.88, and the Cboe small companies was up 0.3% at 18,231.59. In European equities on Wednesday, the CAC 40 in Paris was down 0.6%, while the DAX 40 in Frankfurt was up 0.3%. Sterling was at $1.3256 on Wednesday morning, down from $1.3263 at the London equities close on Tuesday. Against the euro, sterling was higher at €1.1623 from €1.1614. The euro was lower at $1.1398 from $1.1419. Against the yen, the dollar firmed to JP¥162.68 from JP¥162.60. ‘A new twist with the US/Iran peace talks caused ripples across the market as investors grow tired of non-stop setbacks,’ said AJ Bell analyst Russ Mould. Iran and the US are to hold indirect talks with mediators in Doha on Wednesday in a push to advance negotiations and quell tensions following exchanges of fire between the two sides. Both have said they will send officials to discuss their memorandum of understanding aimed at ending the Middle East war, but Iran has insisted direct negotiations will not take place. The foes would take part in ‘indirect technical talks on Wednesday in Doha with Qatari and Pakistani mediators’, a diplomat with knowledge of the talks told AFP on condition of anonymity. Brent crude was trading lower at $72.17 a barrel on Wednesday morning from $73.04 on Tuesday. Meanwhile, the UK manufacturing sector ended the second quarter of 2026 on a positive note, although the pace of expansion fell short of market hopes, a closely watched report showed. The seasonally adjusted S&P Global UK manufacturing purchasing managers’ index posted 52.5 points in June, down from May’s four-year high of 53.9, and below the earlier flash estimate of 53.1. The manufacturing PMI has expanded for the last eight months, and in June remained above the 50.0 no change mark. Companies continued to benefit from clients’ strategic stockpiling, although a softer uplift in incoming new orders suggested the impetus provided by this was already starting to fade, S&P Global said. Output, new orders and employment all expanded and suppliers’ delivery times lengthened in June, although stocks of purchases fell following a solid rise in the prior survey month. Rob Dobson, director at S&P Global Market Intelligence said while the UK manufacturing sector ended the second quarter on a positive note, ‘sustaining the upturn is becoming a bigger concern’. ‘Manufacturers are currently benefiting from client strategic stockpiling, as they safeguard against supply chain disruptions and expected price rises. A drop in the rate of growth of new work intakes suggests this boost is already starting to fade,’ he added. Elsewhere, the eurozone’s consumer price index inflation slowed more than anticipated in June as energy prices continued to fall on-month, data published by Eurostat showed. The eurozone annual CPI inflation rate came down to 2.8% in June from 3.2% in May, more than the FXStreet-cited consensus of a deceleration to 3.0% in June. Notably, the on-year rise in energy prices slowed to 8.7% in June from 10.8% in May, while that of processed food decelerated to 3.2% from 4.0%. Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.2%, the S&P 500 index 0.2% lower, and the Nasdaq Composite to fall 0.5%. The yield on the US 10-year Treasury was quoted at 4.47% on Wednesday morning, widened from 4.40% on Tuesday. The yield on the US 30-year Treasury grew to 4.96% from 4.89%. Back in London, defence stocks continued to climb after the UK government set out its defence investment plan on Tuesday. The UK plans to spend almost £300 billion over the next four years to modernise its armed forces. The proposals see an extra £15 billion being pumped into defence spending up to 2030. UK Prime Minister Keir Starmer called the £300 billion figure a ‘record investment’ that would transform Britain’s military, as the nature of modern warfare changes. Shares in Babcock International led the FTSE 100 and were up 5.0%, Rolls-Royce was up 2.0%, BAE Systems climbed 1.8% and Melrose rose 1.5%. On the FTSE 250 index, shares in Chemring were up 3.7%. The provider of technology products and services to the aerospace, defence and security markets said its US subsidiary, Chemring Sensors & Electronic Systems, has been awarded a three-year contract worth up to $48.8 million. The contract for the Joint Biological Tactical Detection System Programme of Record was awarded by the Capability Program Executive for Chemical, Biological, Radiological & Nuclear Defense. The full rate production deal has an estimated completion date of June 2029, with Chemring receiving an initial production contract valued at $36.3 million to run to March 2028, with the work to be done at Chemring’s Charlotte, North Carolina site. On the AIM market, Shearwater shares were up 14%. The London-based cybersecurity advisory firm said it has won a five-year contract expansion valued at around £25 million with a ‘leading UK-based global telecommunications provider’. Around £12.5 million of the value will be recognised in financial 2026. This underpins Shearwater’s confidence in achieving market expectations for earnings before interest, tax, depreciation and amortisation, with revenue expected to be slightly ahead of expectations. Among small caps, Carclo shares fell 15%. The London-based provider of precision components said revenue falls 5.8% to £114.2 million in the financial year to the end of March from £121.2 million a year earlier. Pretax profit improved to £4.8 million from £2.7 million. However, the company said market conditions are currently mixed. Carclo said: ‘We anticipate demand strengthening as we move through the year as a number of our new growth initiatives come on stream and accordingly expect trading to be weighted towards the second half and to deliver positive organic revenue growth for the full year.’ Gold was lower at $3,995.38 an ounce early on Wednesday from $4,032.83 late Tuesday. Still to come on Wednesday’s economic calendar is the ADP private payroll report in the US for June, as well as a US manufacturing PMI reading. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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