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UK Shares Tumble on Rising Geopolitical Risk; Vistry CFO Plans Departure

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London's FTSE 100 closed 1.86% lower on Wednesday after overnight US strikes in Iran, with President Donald Trump suggesting the tentative ceasefire between the two countries had effectively ended.

"Iran has condemned both measures as violations of the agreement and vowed a response, raising concerns that the fragile peace process reached last month could unravel before negotiations on a permanent settlement are completed. While US officials have stressed that talks towards a longer-term accord continue, the latest escalation represents the most serious test yet for the ceasefire," Deutsche Bank Research said.

The UK and the Netherlands agreed to a 2.4 billion-pound-sterling maritime defense partnership to jointly develop and build eight amphibious transport ships. The 160-meter vessels, four for each country, are expected to support the longstanding UK-Netherlands Amphibious Force and strengthen NATO's rapid-response capabilities.

Britain and Turkey signed a new Security and Defence Partnership at the NATO Summit in Ankara, Turkey, aiming to formalize and expand their partnership on defense and security issues, underscoring both countries' commitment to strengthening their longstanding strategic partnership.

Separately, the International Monetary Fund raised its UK economic growth forecast for 2026 to 1.0% from 0.8% as the energy shock dissipates. The IMF left its 2027 growth forecast unchanged at 1.3%.

In corporate news, homebuilder Vistry Group (VTY.L) plunged 6.89% after flagging a loss before tax of 30 million pounds for the first half and announcing Chief Financial Officer Tim Lawlor will step down in October.

"[We] expect weakness in the shares today as we believe that there are downside risks to estimates as the strategic review continues. We think things could get worse before they get better," RBC Capital Markets said.

Student accommodation owner and operator Unite Group (UTG.L) reaffirmed 2026 adjusted EPS guidance of between 0.415 pound and 0.430 pound. "Management needs time to execute on its strategy to realign the portfolio toward higher-tariff universities. We believe that it could take two full sales cycles to fully understand the cyclical and/or structural dynamics that are currently affecting the UK student accommodation market," Berenberg said. The stock was down 2.98%.

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