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UK's FTSE 100 Extends Losses on Rising Geopolitical Risk, Oil Prices

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British stocks extended their losses Wednesday, with the FTSE 100 down 0.26% at close, as renewed US strikes on Iranian targets near the Strait of Hormuz heightened concerns over oil supplies and pushed crude prices to more than one-month highs.

The strikes came in response to Iranian missile launches targeting a US base in Jordan and ships transiting the waterway. US President Donald Trump warned that Iran would face further attacks if it retaliated, while Tehran continued its "decisive operation" against US bases in the region.

Meanwhile, US Treasury Secretary Scott Bessent highlighted British Virgin accounts linked to Iran, with a plan to target airline leasing companies to enforce planned economic sanctions. In two years, oil will be transported through land pipelines, giving countries a way around the Strait of Hormuz, Bessent said.

Back home, UK Chancellor of the Exchequer John Healey is set to deliver his first major speech in his new role on Sept. 7, Politico reported, citing four people with knowledge of the date. The Treasury did not immediately respond to a request for comment from.

In corporate news, Cairn Homes (CRN.L) shares rose 3.83% amid a yearly increase in attributable profit and revenue for the first half. The Irish homebuilder updated its full-year revenue outlook to 1.08 billion euros, the top end of its previously guided range, and launched a share buyback program of up to 50 million euros.

Halma (HLMA.L) also gained 0.85% after agreeing to acquire US-based water quality monitoring and analysis technology company Pyxis for an initial consideration of $170 million. The British safety technology company will make additional milestone-based earnout payments of up to $30 million.

Meanwhile, British energy giant BP (BP.L) edged up 0.04% after announcing that Interim Chair Ian Tyler will take on the role permanently. Tyler replaced Albert Manifold in May after the latter was removed over governance and conduct concerns.

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Update: US Equity Indexes Drop as Treasury Yields, Crude Oil Surge Following Fresh Military Strikes on Iran

(Updates with index/price moves, macroeconomic data and geopolitical news from the first paragraph.)US equity indexes fell amid soaring crude oil prices and the markets witnessed a surge in the benchmark government bond yield to the highest in about 18 months, as Iran vowed to inflict severe damage following Washington's strikes on targets on the Islamic Republic on Tuesday afternoon.The Nasdaq Composite fell 1% to 26,099.77, the S&P 500 retreated 0.7% to 7,631.47, and the Dow Jones Industrial Average slid 0.8% to 52,766.88 ahead of the market close. Consumer discretionary, industrials, materials and technology led decliners, while energy topped gainers.US forces began striking Islamic Revolutionary Guard Corps targets in Iran, the US Central Command said in a message on X, formerly Twitter. The strikes follow recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members deployed to the region. These new hostilities come as the duo traded attacks overnight and into Monday, the first exchange after more than a month.Iranian media reported explosions in Bandar Abbas, Qeshm Island, Konarak, Chabahar, Jask, Sirik and Lavan, Al Jazeera, a Middle Eastern broadcaster, reported. Iran's army and the Iran Revolutionary Guards Corps promised the US would regret and face "severe punishment" for the aggression, the news report said.Meanwhile, US Secretary of the Treasury Scott Bessent said the Iran blockade is "very powerful" and "we are going to economically asphyxiate this regime," Al Jazeera reported. The US will announce new sanctions on "anyone that does business with the IRGC" while the US is "tracking down the IRGC's assets," Bessent was cited as saying.If the US "will is that we do not export oil [then] no one will be able to export oil," Iran's Parliament Speaker Mohammad Bagher Ghalibaf said in a video message shared by Iranian news agencies, according to Al Jazeera.The front-month US West Texas Intermediate crude oil contract surged 5.9% to $90.83 per barrel, and global benchmark North Sea Brent soared 5.3% to $95.32 per barrel.Most US Treasury yields rose. The 10-year yield jumped 3.8 basis points to 4.8%, the highest since January 2025, and the two-year advanced five basis points to 4.4%.Gold futures dropped 2.4% to $4,372.7, and silver futures slumped 3.5% to $64.62.In economic news, US job openings rose to 7.271 million in July, according to the Bureau of Labor Statistics, below the 7.313 million openings expected in a survey compiled by Bloomberg, but up from the 7.182 million openings reported in June. The July level represents 4.4% of total employment, up from 4.3% in June and 4.3% a year earlier.The Institute for Supply Management's US manufacturing index fell to 54.6 in August from 55.6 in July, compared with expectations for 55.2 in a survey compiled by Bloomberg. The index indicates expansion, in line with most regional manufacturing sector readings and the S&P Global index, but contrasts with the Chicago PMI reading that suggested contraction.The first look at consumer confidence for September improved from August, with the RealClearMarkets' monthly index rising to 45.6 from 45.1. The index reading was the highest since March.The probability of the Federal Reserve raising its target rate by 25 basis points to 3.75%-4.0% in September surged to 68% late Tuesday from 40% a day ago, according to the CME FedWatch tool. The likelihood of another increase of the same magnitude in October is more than a fifth, putting into perspective a 9% chance of the rates remaining at the current level by December.

Dow JonesNasdaq CompositeS&P 500
Asia Markets

Update: US Equity Indexes Drop as Treasury Yields, Crude Oil Jump Amid Fresh Military Strikes on Iran

(Updates with index/price moves, macroeconomic data, and geopolitical news from the first paragraph.)US equity indexes fell amid rising crude oil prices and a surge in the benchmark government bond yield to the highest in about 18 months as Washington struck Iranian targets on Tuesday.The Nasdaq Composite fell 0.9% to 26,122.9, the S&P 500 retreated 0.7% to 7,633.1, and the Dow Jones Industrial Average slid 0.8% to 52,747.8 after midday.Consumer discretionary, industrials, materials and technology led decliners, while energy topped gainers.US forces began striking Islamic Revolutionary Guard Corps targets in Iran, the US Central Command said in a message on X, formerly Twitter. The strikes follow recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members deployed to the region.US Secretary of the Treasury Scott Bessent said the Iran blockade is "very powerful" and "we are going to economically asphyxiate this regime," Al Jazeera, a Middle Eastern broadcaster, reported. The US will announce new sanctions on "anyone that does business with the IRGC" while the US is "tracking down the IRGC's assets," Bessent was cited as saying.In a video message shared by Iranian news agencies, Iran's Parliament Speaker Mohammad Bagher Ghalibaf said the US's naval blockade against Iran amounts to a military act and that Tehran will respond militarily if it intensifies, according to Al Jazeera. If the US's "will is that we do not export oil" from the Gulf, Ghalibaf said, "no one will be able to export oil."Two oil supertankers attempting to exit the Strait of Hormuz were struck by projectiles late Monday, Bloomberg reported, citing maritime security consultant Marisks.The front-month US West Texas Intermediate crude oil contract advanced 4.3% to $89.52 per barrel, and global benchmark North Sea Brent climbed 3.9% to $94.04 per barrel.Most US Treasury yields rose. The 10-year yield rose three basis points to 4.79%, the highest level since January 2025, and the two-year advanced 3.5 basis points to 4.39%.Gold futures dropped 1.9% to $4,397.30, and silver futures slumped 2.4% to $65.38.In economic news, US job openings rose to 7.271 million in July, according to the Bureau of Labor Statistics, below the 7.313 million openings expected in a survey compiled by Bloomberg, but up from the 7.182 million openings reported in June. The July level represents 4.4% of total employment, up from 4.3% in June and 4.3% a year earlier.The Institute for Supply Management's US manufacturing index fell to 54.6 in August from 55.6 in July, compared with expectations for 55.2 in a survey compiled by Bloomberg. The index indicates expansion, in line with most regional manufacturing sector readings and the S&P Global index, but contrasts with the Chicago PMI reading that suggested contraction.The first look at consumer confidence for September improved from August, with the RealClearMarkets' monthly index rising to 45.6 from 45.1. The index reading was the highest since March.The probability of the Federal Reserve raising its target rate by 25 basis points to 3.75%-4.0% in September surged to 66% after midday Tuesday from 40% a day ago, according to the CME FedWatch tool. The likelihood of another increase of the same magnitude in October is almost a fifth, putting into perspective a 10% chance of the rates remaining at the current level by December.

Dow JonesNasdaq CompositeS&P 500
Asia Markets

Exchange-Traded Funds Decline as US Equities Fall After Midday

Broad Market IndicatorsBroad-market exchange-traded funds IWM and IVV were lower. Actively traded Invesco QQQ Trust (QQQ) eased 1.1%.US equity indexes declined amid rising crude oil prices and a surge in the benchmark government bond yield to the highest in about 18 months as Iran's geopolitics deteriorated.EnergyIShares US Energy ETF (IYE) and the State Street Energy Select Sector SPDR (XLE) each added about 0.7%.TechnologyThe State Street Technology Select Sector SPDR ETF (XLK) edged down 1.5%; iShares US Technology ETF (IYW) and iShares Expanded Tech Sector ETF (IGM) were softer.The State Street SPDR S&P Semiconductor (XSD) slipped 2.7%, while iShares Semiconductor (SOXX) fell 2%.FinancialThe State Street Financial Select Sector SPDR (XLF) dipped 0.8%. Direxion Daily Financial Bull 3X Shares (FAS) declined 2.4%, and its bearish counterpart, Direxion Daily Financial Bear 3X Shares (FAZ), advanced 2.5%.CommoditiesCrude oil rose 4.2%, and the United States Oil Fund (USO) added 4.1%. Natural gas lost 1.1%, and the United States Natural Gas Fund (UNG) was down 1.2%.Gold on Comex slipped 1.8%, and the State Street SPDR Gold Shares (GLD) was down 2.2%. Silver fell 2.1%, and iShares Silver Trust (SLV) shed 2.2%.ConsumerThe State Street Consumer Staples Select Sector SPDR (XLP) added 0.5%. The Vanguard Consumer Staples ETF (VDC) gained 0.5%, and iShares Dow Jones US Consumer Goods (IYK) was up 0.6%.The State Street Consumer Discretionary Select Sector SPDR (XLY) eased 1.6%. VanEck Retail ETF (RTH) was down 0.3%, and the State Street SPDR S&P Retail (XRT) dipped 0.3%.HealthcareThe State Street Health Care Select Sector SPDR (XLV) rose 0.4%. iShares US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were also higher. IShares Biotechnology ETF (IBB) added 0.3%.IndustrialThe State Street Industrial Select Sector SPDR (XLI) fell 1.6%. Vanguard Industrials Index Fund (VIS) and iShares US Industrials (IYJ) were also in the red.CryptocurrencyIn midday activity, bitcoin (BTC-USD) dropped 1.7%. Among cryptocurrency ETFs, ProShares Bitcoin ETF (BITO) lost 1.7%, ProShares Ether ETF (EETH) was down 2%, and ProShares Bitcoin & Ether Market Cap Weight ETF (BETH) gained 1.9%.

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