The FTSE 100 showed signs of much-appreciated stabilisation on Wednesday after posting one of the worst days since liberation day on Tuesday.
London’s leading index was 0.7% higher at the time of writing, having staged a 100-point rally from lows around 10,450 to 10,560 intraday.
“If yesterday was capitulation, today is investors catching their breath,” said Russ Mould, investment director at AJ Bell.
“Most of the main European stock markets regained their balance and either edged higher or held firm, much to the relief of investors who have witnessed two days of share prices flashing red.”
The Middle East Conflict has been a reminder of just how quickly markets can move if fundamentals and sentiment change abruptly. Just last week, commentators were counting down the FTSE 100 points to 11,000. Fast forward three days, and 10,000 was looking more likely.
But there has been a break in the selling today, with bargain hunters stepping in to sweep up beaten-down FTSE 100 names.
Markets tend to overreact, and traders are usually quick to look past the worst-case scenario and consider where we could be in a few months’ time.
With the war in the Middle East only likely to last a month at most – should Trump’s own guidelines be anything to go by – names such as Antofagasta, Entain, and IAG caught the attention of traders.
Miners were among the top risers on after sharp declines this week that some may argue were due anyway, given the strong start to 2026.
BP’s rally is beginning to fade as the stock fell back to levels similar to those last Friday. This may be a sign that the market doesn’t seem to foresee a prolonged conflict that sends oil to $100.
Housebuilders were among the worst-performing stocks as they fell in sympathy with Vistry, which posted poor results that showed slowing demand across the new build ecosystem.
Persimmon and Barratt Redrow were down between 0.5% and 1%.