London midday: Stocks fall as oil rises; B&M surges on results

(Sharecast News) - London stocks had declined further by midday on Wednesday as oil prices rose following fresh strikes by the US and Iran, and as data showed that activity in the UK services sector fell in May for the first time in over a year.

The FTSE 100 was down 0.4% at 10,335.01, while Brent crude was 2.7% higher at $98.63 a barrel.

In a post on Truth Social on Tuesday, Trump dismissed recent reports that the US and Iran had stopped peace talks.

"Fake News Reports that the Islamic Republic of Iran, and the U.S.A., stopped speaking a few days ago are false and erroneous," he said. "The conversations between us have been going on continuously, including four days ago, three days ago, two days ago, one day ago, and today.

"Where they lead, one never knows, but as I told Iran, 'It's time, one way or another, for you to make a Deal. You've been doing this for 47 years, and it cannot be allowed to go on any longer!"

Investors were also mulling the Trump administration's proposed additional tariffs of 10% or 12.5% on imports from 60 economies, including the European Union and the UK.

Susannah Streeter, chief investment strategist at Wealth Club, said: "Sweeping new US tariffs look set to be imposed, reopening raw trade wounds just as the energy crunch is turning into a chronic problem for economies around the world. London's blue-chip index has retreated in early trade, as a more pessimistic attitude creeps back in.

"The OECD has warned that the global outlook has weakened significantly since war erupted in the Middle East, and the fall out will have significant repercussions. Fresh strikes by Iran on Kuwait and Bahrain have caused fresh nervousness about just how long the Middle East crisis will continue for. Oil prices are reflecting this concern, with Brent crude, the benchmark, nudging $98 a barrel.

"Without the life buoy of big tech offering support amid the frenzy of enthusiasm over AI opportunities, prospects for the broader global economy are more of a driver of sentiment for the FTSE 100."

On home turf, a survey showed the UK economy stumbled in May as the dominant services sector saw activity fall for the first time in over a year.

The S&P Global UK services PMI business activity index came in at 49.3, down on April's 52.7 and the first reading below the neutral 50.0 benchmark since April 2025. A reading above 50.0 suggests growth while one below indicates contraction.

The decline was less steep than feared, with most economists expecting a reading of 47.9.

But it still weighed on the composite PMI, which fell to 49.7 from 52.6. The composite PMI is a weighted average of the manufacturing and services indices. The manufacturing PMI, published earlier this week, was 53.9.

Respondents to the services survey said increased risk aversion among clients was weighing on demand alongside budget pressures, with input prices rising sharply. More subdued consumer spending was also noted, especially around the travel, tourism and leisure sector.

Tim Moore, economics director at S&P Global Market Intelligence, said: "UK service sector companies signalled a reversal of fortunes in May. Subdued business and consumer demand, across both domestic and overseas markets, was cited as holding back performance.

"Many companies noted that the Middle East conflict had an adverse impact on sales pipelines and general business prospects.

"Worries about a prolonged spike in inflationary pressures, combined with elevated geopolitical tensions and subdued demand, continued to weight on business activity expectations."

In equity markets, shares of B&M European Value Retail surged after the retailer posted a smaller-than-expected slide in annual profits, despite being hit hard by weaker sales in the UK and soaring costs. Adjusted pre-tax profits fell 38% to £284m, but the slump was not as steep as feared, with consensus closer to £274m.

Investors were also reassured by chief executive Tjeerd Jegen's optimistic tone looking forward.

Howden Joinery jumped after saying it has agreed to buy DIY Kitchens for £390m, while electricals retailer Currys edged higher as it appointed insider Fredrik Tønnesen as chief executive to replace Alex Baldock.

Ninety One and Discoverie both lost ground after results.

Market Movers

FTSE 100 (UKX) 10,335.01 -0.37%

FTSE 250 (MCX) 23,315.19 -0.27%

techMARK (TASX) 5,935.45 -0.50%

FTSE 100 - Risers

SSE (SSE) 2,320.00p 2.97%

Bunzl (BNZL) 2,350.00p 2.89%

United Utilities Group (UU.) 1,308.00p 2.27%

Whitbread (WTB) 2,340.00p 2.18%

Tesco (TSCO) 437.40p 1.77%

Sainsbury (J) (SBRY) 301.20p 1.69%

BP (BP.) 545.80p 1.57%

Shell (SHEL) 3,263.50p 1.37%

Centrica (CNA) 188.30p 1.18%

Convatec Group (CTEC) 197.30p 1.18%

FTSE 100 - Fallers

ICG (ICG) 1,759.00p -5.61%

AstraZeneca (AZN) 12,748.00p -3.19%

Melrose Industries (MRO) 445.50p -3.04%

Burberry Group (BRBY) 1,140.50p -2.35%

Rio Tinto (RIO) 8,135.00p -1.93%

Fresnillo (FRES) 3,218.00p -1.85%

Croda International (CRDA) 2,972.00p -1.82%

Scottish Mortgage Inv Trust (SMT) 1,516.00p -1.81%

Metlen Energy & Metals (MTLN) 40.84p -1.80%

Rolls-Royce Holdings (RR.) 1,258.00p -1.61%

FTSE 250 - Risers

B&M European Value Retail (BME) 197.70p 16.25%

Ceres Power Holdings (CWR) 838.00p 3.45%

Howden Joinery Group (HWDN) 774.50p 2.91%

Harbour Energy (HBR) 286.40p 2.29%

Paragon Banking Group (PAG) 747.50p 2.04%

Cranswick (CWK) 5,520.00p 2.03%

Ithaca Energy (ITH) 235.30p 1.78%

SDCL Efficiency Income Trust (SEIT) 46.50p 1.75%

Frasers Group (FRAS) 743.50p 1.57%

Harworth Group (HWG) 123.80p 1.48%

FTSE 250 - Fallers

Ninety One (N91) 206.80p -6.84%

W.A.G Payment Solutions (EWG) 108.60p -5.07%

IP Group (IPO) 67.50p -4.39%

Bridgepoint Group (Reg S) (BPT) 256.80p -3.68%

Wizz Air Holdings (WIZZ) 1,006.00p -3.27%

easyJet (EZJ) 450.40p -2.97%

Discoverie Group (DSCV) 758.00p -2.57%

Ashmore Group (ASHM) 202.80p -2.41%

Abrdn (ABDN) 241.00p -2.27%

Patria Private Equity Trust (PPET) 610.00p -2.24%