25th Mar 2026 12:18
(Alliance News) - Stock prices in London were firmly higher at midday Wednesday, though gains trailed those seen in Europe, as optimism grew that tensions in the Middle East could begin to ease.
The FTSE 100 index was up 135.38 points, 1.4%, at 10,100.55. The FTSE 250 was up 343.87 points, 1.6%, at 21,479.64, and the AIM all-share was up 14.94 points, 2.1%, at 729.04.
The Cboe UK 100 was up 1.5% at 1,006.42, the Cboe UK 250 was up 1.4% at 18,679.41, and the Cboe small companies was up 0.2% at 16,838.77.
UK equities were higher, albeit slightly lagging gains in Europe, on hopes that tensions in the Middle East could ease.
Iran has reportedly received a 15-point peace proposal from the US, according to reports from Pakistan, which is acting as an intermediary.
The plan, which has not been made public, is said to include Iran dismantling its nuclear facilities in exchange for sanctions relief.
Tehran did not confirm it received the plan and publicly dismissed the diplomatic effort, while launching more attacks on Israel and Gulf Arab countries, including an assault that sparked a huge fire at Kuwait International Airport.
An Israeli minister told the BBC the proposal is "beautiful on paper", but added that Iran is "probably" unlikely to agree to it.
Earlier, a spokesperson for Iran's military said the US was "negotiating with itself", adding: "Someone like us will never come to terms with someone like you."
On Tuesday, US President Donald Trump insisted Iran wants a deal "so badly", saying Tehran had given the US a "very big present worth a tremendous amount of money".
Meanwhile, Iran's mission to the UN said "non-hostile vessels" can pass through the Strait of Hormuz, with some ships from China, India and Pakistan already navigating the vital waterway.
Oil prices eased on hopes that a de-escalation in Middle East tensions could be in sight. Brent oil was quoted at USD98.18 a barrel early in London on Wednesday from USD103.95 late Tuesday. It hit lows of as much as USD97.07.
In European equities on Wednesday, the CAC 40 in Paris was up 1.7%, while the DAX 40 in Frankfurt was up 1.8%.
The pound was quoted at USD1.3413 at midday Wednesday, higher compared to USD1.3394 Tuesday. Against the euro, sterling rose to EUR1.1559 from EUR1.1551 a day prior. The euro stood at USD1.1604, up from USD1.1591. Against the yen, the dollar was trading at JPY158.88, slightly higher than JPY158.82.
Back in the UK, inflation held steady in February, but economists cautioned that the figures already appear dated as the economic fallout from the Middle East conflict reshapes the outlook for prices and interest rates.
Figures from the Office for National Statistics showed the consumer prices index rose 3.0% on-year in February, unchanged from January, while broader CPIH inflation held at 3.2%.
At first glance, the data suggested a relatively stable inflation environment. However, analysts noted that the figures reflect a period before the escalation in tensions in Iran and the surge in energy prices that followed the closure of the Strait of Hormuz.
ING Economics said the current data is unlikely to materially alter the Bank of England's near-term policy stance.
"At current energy prices, UK inflation is set to peak between 3.5-4% this autumn. That's around a percentage-point higher than we'd expected pre-war, not exactly a game-changer for a central bank that was on the verge of cutting rates this month," ING said.
Markets have taken a more forceful view, pricing in multiple rate hikes this year amid rising inflation expectations.
According to Bloomberg, markets are now pricing in fewer than two rate increases by year-end, down from three previously and from a brief period last week when four hikes were expected before the end of 2026.
At the top of the FTSE 100 were Croda International, up 4.8% after Morgan Stanley raised it to 'overweight' with a 3,350p target, and ICG, up 4.4% after its chief financial officer bought GBP447,900 in shares. Goldman Sachs, however, cut its price target to 2,860p but kept a 'buy' rating.
At the bottom of the blue-chip index was Experian, down 1.6%, after US peer Fair Isaac Corp fell 6.4% in New York on Tuesday.
US Federal Housing Finance Agency Director Bill Pulte wrote on social media that "credit score pricing and credit bureau pricing must be more affordable". US Senator Josh Hawley said he is launching a probe into Fair Isaac. Experian currently charges for more detailed access to credit score information.
On the FTSE 250, HICL Infrastructure rose 2.7% after agreeing to sell its 24% stake in the A63 motorway in France via its holding in Atlandes SA, following nearly a decade of ownership.
The asset was the company's second-largest at the time of its initial investment in 2017 and accounted for 8.4% of the portfolio at September 30. Gross proceeds from the disposal are GBP311 million, a 21% premium to the most recent valuation, and will add 2.2p to net asset value per share.
Among smaller caps, Volex climbed 8.6% after saying full-year results are expected to "significantly" exceed market consensus, and that it is considering a move to London's Main Market.
The group expects revenue of at least USD1.22 billion, ahead of consensus forecasts of USD1.18 billion, with underlying operating profit also set to beat expectations. In the 52 weeks to March 30, 2025, Volex reported underlying operating profit of USD106.2 million on revenue of USD1.09 billion.
Asos rose 14% after backing its guidance and reporting "continued progress" in the first half to March 1. Gross merchandise value fell 9% on-year but showed a sequential quarterly improvement. Adjusted gross margin rose 330 basis points to 48.5%, while adjusted earnings before interest, tax, depreciation and amortisation increased 50%. The retailer maintained its annual adjusted Ebitda guidance of GBP150 million to GBP180 million.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 1.1%, the S&P 500 up 1.0%, and the Nasdaq Composite up 1.2%.
On the data front, US export prices are due at 1230 GMT, with consensus for a 0.5% month-on-month rise in February, compared with 0.6% in January. US import prices, due at the same time, are expected to rise 0.5% on-month in February, after a 0.2% increase in January.
Concerns in Wall Street's private credit market intensified after Apollo Global Management capped redemptions from one of its flagship funds, following investor requests to withdraw USD1.6 billion over the past three months, as scrutiny of the USD3 trillion sector grows.
The yield on the US 10-year Treasury was quoted at 4.31%, narrowing from 4.38%. The yield on the US 30-year Treasury was quoted at 4.88%, narrowing from 4.94%.
Gold was quoted at USD4,582.21 an ounce, down sharply this week. The metal has suffered its worst weekly performance since 1983, dropping 11% and falling more than 14% since the war began, despite traditionally being viewed as a safe haven during periods of economic uncertainty.
Still to come on Wednesday's economic calendar are US export and import prices, which will be out very soon at 1230 GMT.
By Eva Castanedo, Alliance News reporter
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