The FTSE 100 was flat on Wednesday after the US announced it would extend the Middle East war ceasefire indefinitely.
London’s leading index sold off into yesterday’s close as fears mounted around the resumption of fighting in the Middle East as a ceasefire deadline approached, but found a firmer footing as traders digested the latest developments in the Middle East.
Trump has chickened out again and extended the ceasefire indefinitely. While this is, of course, positive for equity markets, the blockade on Iranian ports remains in place, which will curtail oil flows, driving another tick higher in oil prices. Brent was back up at $99 at the tme of writing.
“The FTSE 100 was steady after an extension to the ceasefire between the US and Iran,” said AJ Bell investment director Russ Mould.
“Mixed messages from Donald Trump, and an insistence that a US blockade of Iran will continue, mean investors are still playing a guessing game. Suggestions from the Iranian side that they will not attend today’s talks in Pakistan and an attack on a container ship off Oman add to the fog of uncertainty.
“Having tipped into alarm bell territory above $100 per barrel, oil prices have now dipped below this level – but they still tell a story of distress in global energy markets.”
Reckitt Benckiser was the FTSE 100’s top faller after releasing a downbeat trading statement and warning of disruption in the Middle East.
Adam Vettese, market analyst for eToro, says: “Reckitt Benckiser’s Q1 trading update delivered a disappointing start to the year, with shares opening down more than 5% this morning as investors reacted to the earnings miss.”
“Core Reckitt posted like for like net revenue growth of just 1.3%, well below consensus and the group’s 4-5% medium-term target. The weakness stemmed from a markedly soft cold and flu season, retailer destocking and tough trading in developed markets, where Europe/ANZ fell 4.2% and Household Care dropped 7.6%.”
Reckitt’s shares were down 6% at the time of writing.
Bunzl, on the flip side, was the FTSE 100’s best performer, driven by a more positive update and revenue numbers that exceeded expectations.
Miners were higher as a result of a pick-up in sentiment. Rio Tinto rose 1.8% as precious metals miners Fresnillo added 1%.
UK inflation rising to 3.3% in March served as a reminder that consumers could be in for a bumpy ride in the coming months and made trail names such as JD Sports less attractive on Wednesday. JD Sports shares slipped 3%.