UK Shares Fall Amid Mixed US-Iran War Headlines; Balfour Beatty Lifts Outlook
British equities traded on both sides of the line on Wednesday, with the benchmark FTSE 100 closing 0.18% lower, amid growing uncertainty over the Strait of Hormuz blockade and the wider US-Iran conflict.Investors received mixed geopolitical news from across the globe. Pakistan's defense minister, Khawaja Asif, told Bloomberg that the US and Iran were nearing a possible "arrangement" to resume traffic through the Strait of Hormuz. Additionally, a spokesperson for Qatar's Foreign Ministry told Al Jazeera that Oman and Iran were at an advanced stage of negotiations.At the same time, a Houthi strike in the Bab el-Mandeb Strait was suspected, and a US attack on a vessel in the Gulf of Oman was reported, with President Donald Trump saying "we totally control the Strait of Hormuz" and that "right now, we're in a very good position."In corporate news, Bunzl (BNZL.L) dropped 1.71% after Deutsche Bank Research downgraded the distribution and outsourcing group to hold from buy, while raising the price target to 30 pounds sterling from 29.5 pounds."2026 has brought positive volume growth (aided by easier comparatives and improved wins), a return to inflation (passing on geopolitically-driven product cost inflation) and restored service and product availability in its North America Distribution business. H1 results on 1 September should confirm better operational delivery, positive volume trends and a more supportive pricing backdrop. H2 also offers potential upside from more persistent product-cost inflation and renewed acquisition activity. However, with the shares having largely recovered the ground lost after the 2025 profit warning, and now trading closer to its long-run average valuation multiples, we believe these positives are more fairly reflected in the price," analysts said.Additionally, Hill & Smith (HILS.L) declined 5.35% after the construction and infrastructure products company's profit attributable to the owners of the parent for the six months ended June 30 fell to $47.7 million from $61.4 million a year ago."Overall, we are making good strategic progress, and we are well positioned to continue delivering against our medium-term financial framework. Following the strong first half and with sustained US momentum we now expect FY26 underlying operating profit to be modestly ahead of our previous expectations," Chief Executive Officer Rutger Helbing said, noting "challenging" UK trading conditions.On the upside, Balfour Beatty (BBY.L) climbed 7.91% after updating its 2026 outlook for net finance income between 35 million pounds and 40 million pounds, compared with its previous guidance range of 28 million pounds to 32 million pounds. The infrastructure company also raised its growth outlook for underlying profit from operations from earnings-based businesses to low double digits from high single digits.
