18th Mar 2026 17:18
(Alliance News) - Stock prices in London closed in the red on Wednesday, as markets wait for the US rate decision and after the Iran war's latest developments sent the price of oil rocketing upwards amid fears of a "supply crisis".
Brent oil was quoted at USD108.21 a barrel at the time of the London equities close on Wednesday, up from USD101.95 late Tuesday. Although below the conflict's peak of USD119.25, this remains well above the USD73.08 level recorded on February 27, before tensions escalated.
The latest spike follows US-Israeli strikes that hit Iranian facilities at a major Gulf gas asset, the South Pars/North Dome mega-field, which supplies around 70% of Iran's domestic natural gas and is the world's largest known gas reserve.
"If you thought it would be plain sailing into the FOMC meeting later this evening, think again," remarked XTB's Kathleen Brooks. "Markets are back in panic mode. The Brent crude oil price is surging and is higher by another 5% today, the gold price is down 2.8% and is below USD5,000 per ounce, bonds are getting sold off and yields are surging and the dollar is rallying."
She continued: "Iran has warned Gulf nations that their energy assets and infrastructure are now legitimate targets...The risk is that an oil shipping crisis is morphing into an oil supply crisis.
"Unsurprisingly, this has spooked a market that was wiling to grasp hopeful signs that tankers were slowly getting through the Strait of Hormuz, and that countries like Saudi Arabia and Iraq could get oil into the market through alternative routes."
In London, BP was up 0.7%, while Shell lost 0.4%.
Gold was quoted lower at USD4,875.60 an ounce against USD4,994.57 on Tuesday.
Back in London, gold miners suffered, with Endeavour down 3.9%, Fresnillo down 3.5%, and Antofagasta down 3.0%.
The wider FTSE 100 index closed down 98.31 points, 0.9%, at 10,305.29. The FTSE 250 ended down 95.36 points, 0.4%, at 22,080.77, and the AIM all-share closed down 6.93 points, 0.9%, at 753.21.
The Cboe UK 100 was down 1.0% at 1,023.90, the Cboe UK 250 was down 0.3% at 19,267.62, and the Cboe small companies was down 0.4% at 17,466.60.
Travel stocks rose despite the ongoing conflict, with easyJet up 1.5% and British Airways parent International Consolidated Airlines up 1.5%.
Defence stocks climbed. Babcock rose 2.1%, Melrose 1.1% and Rolls-Royce 0.7%.
The pound was quoted lower at USD1.3334 at the time of the London equities close on Wednesday, compared to USD1.3345 on Tuesday. Against the euro, sterling stood at EUR1.1577, similar to EUR1.1576 a day prior.
The euro stood at USD1.1517, lower against USD1.1531. Against the yen, the dollar was trading at JPY159.45, higher compared to JPY159.01.
Stocks in New York were lower. The Dow Jones Industrial Average was down 0.8%, the S&P 500 index down 0.5%, and the Nasdaq Composite down 0.5%.
The yield on the US 10-year Treasury was quoted at 4.22%, widening from 4.20%. The yield on the US 30-year Treasury was quoted at 4.86%, widening from 4.85%.
US President Donald Trump angrily wrote on his Truth Social site that he could leave US allies to secure the Hormuz strait on their own since they have refused to fight alongside US forces against Iran in the crucial shipping lane.
"I wonder what would happen if we 'finished off' what's left of the Iranian Terror State, and let the Countries that use it, we don't, be responsible for the so called 'Strait?' That would get some of our non-responsive 'Allies' in gear, and fast!!! President DJT," he wrote.
Also, US producer prices rose more than expected in February, with gains driven by higher goods and services costs, according to data released by the Bureau of Labor Statistics.
The producer price index for final demand increased 0.7% month-on-month in February, after rises of 0.5% in January and 0.4% in December. The reading came above the FXStreet-cited consensus of a 0.3% increase.
On an annual basis, producer prices were up 3.4%, accelerating from 2.9% in February and beating FXStreet consensus of another 2.9% increase.
"This data has cast doubt on a Fed rate cut for this year," XTB's Brooks said. "There is now just less than one cut priced in, with US interest rates expected to end the year at 3.43%.
"The market is currently expecting the Fed to prioritise inflation risks over growth, especially since the US is more insulated from the full effects of a spike due to its position as the world’s largest energy producer...The Fed is in focus today, but it has no bearing on this conflict.
"The Fed must react to the situation it finds itself in and today has been a clear sign that this conflict is definitely not over."
In European equities on Wednesday, the CAC 40 in Paris closed down 0.1%, while the DAX 40 in Frankfurt ended down 0.9%.
Back in London, Goldplat closed up 12%, despite the yellow metal's retreat.
The gold miner and producer says pretax profit more than doubled to GBP4.7 million in the six months to December 31, from GBP1.8 million a year ago. Revenue rose 53% to GBP45.2 million from GBP29.6 million.
Itim was down 18%.
The retail software solutions provider expects to report revenue of GBP17.5 million for 2025, down from GBP17.9 million in 2024, Ebitda of GBP1.7 million, down from GBP2.5 million, and a pretax loss of GBP464,000, swung from a profit of GBP175,000.
Itim said results are "below current market expectations", due to "a challenging economic backdrop particularly in the retail sector".
The biggest risers on the FTSE 100 were Diploma, up 903.48p at 5,933.48p, Burberry, up 24.71p at 1,071.74p, Barclays, up 8.67p at 402.42p, Weir, up 60.69p at 2,922.69p, and Babcock, up 28.00p at 1,394.00p.
The biggest fallers on the FTSE 100 were Metlen Energy, down 1.60p at 35.70p, Fresnillo, down 126.00p at 3,322.00p, British American Tobacco, down 162.00p at 4,382.00p, Endeavour Mining, down 158.00p at 4,406.00p, and Unilever, down 167.50p at 4,712.50p.
On Thursday's economic calendar, the UK has unemployment and its own rate decision, as well as the European Central Bank's.
On Thursday's UK corporate calendar, there are full-year results from Prudential, Atalaya Mining and others, plus half-year results from DFS Furniture.
By Emma Curzon, Alliance News reporter
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Copyright 2026 Alliance News Ltd. All Rights Reserved.
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