The FTSE 100 was largely flat on Wednesday, with few fresh catalysts to move the dial as Middle East talks dragged on.

Investors were also awaiting several speeches by central bankers that may set the tone for interest rate expectations in the coming months.  

Defence stocks were the standout performers on Wednesday after the UK government revealed its defence spending plan. 

Although critics will say the outgoing prime minister’s plans don’t go far enough to meaningfully boost the UK’s armed forces, the increased spending is likely to flow into the income statements of UK defence firms. 

Babcock was the FTSE 100’s top riser at the time of writing, gaining 4%, while BAE Systems rose 2%.

But any positivity in defence stocks was snuffed out by concerns about developments, or lack of, in the Middle East and upcoming central bank events.

“A new twist with the US/Iran peace talks caused ripples across the market as investors grow tired of non-stop setbacks,” says Russ Mould, investment director at AJ Bell. 

“Iran said it would not meet with visiting US envoys, causing equities to pull back and investors to switch to a risk-off mood.

Commodity companies acted as a leading drag on the index as metal prices fell.

“From steel and aluminium to gold and silver, commodity prices have come under fresh pressure as expectations of higher US interest rates have strengthened the dollar, making metals priced in dollars more expensive for overseas buyers,” said Susannah Streeter, Chief Investment Strategist, Wealth Club.

Rio Tinto, Shell, and BP were all down around 1% at the time of writing. Sainsbury’s made notable gains as the rally sparked by a solid trading update continued.

Shearwater Group has secured a five-year contract extension worth approximately £25 million with a leading UK-based global telecoms provider, through its Brookcourt Solutions subsidiary.

The deal extends and expands a long-standing relationship, covering the continued delivery of Brookcourt’s packet monitoring, forensic analysis and service assurance solutions across the telco’s network infrastructure and key strategic clients.

Around £12.5 million will be booked as FY26 revenue, reflecting the upfront delivery of software and support licences.

That gives the board enough confidence to say it expects to meet market expectations for FY26 EBITDA, with revenue likely to come in slightly ahead.

Phil Higgins, Group Chief Executive Officer of Shearwater Group, said: “We are delighted to have secured this significant five-year expansion agreement with one of the world’s leading telecommunications providers.”

“This award reflects the strength of our technology solutions, the quality of our service delivery and the trusted partnership we have developed with the customer over many years. As network traffic volumes and operational requirements continue to evolve, organisations increasingly require sophisticated packet monitoring and service assurance capabilities to maintain visibility and performance across critical infrastructure. We look forward to continuing to support our customer and its strategic clients throughout the term of this agreement. The expected contribution from this contract in the current financial year further underpins our confidence in achieving the Group’s expectations for FY26.”

The FTSE 100 rose on Tuesday as cyclical shares provided a boost to the index amid hopes of a deal in the Middle East.

London’s leading index was trading 0.9% and higher at the time of writing.

“There’s been cautious optimism unfolding on the Footsie in early trade as investors assess the likelihood of Middle East peace talks progressing and digest relatively stable UK growth figures,” Susannah Streeter, Chief Investment Strategist, Wealth Club.

“Brent crude has inched down again, a measure of hope that negotiations will advance, even though the situation remains somewhat unpredictable. Control of the Strait of Hormuz is set to remain a sticking point in discussions amid concerns that tolls could be imposed after the 60-day free-transit grace period has expired.”

The cautious option described was most felt in cyclical shares, including mining shares and US technology-focused investment trusts.

Higher metals prices translated into higher share prices for the FTSE 100’s miners. Antofagasta was the top riser at the time of writing, gaining 3.9%.

Anglo American was not far behind, ticking up by 3.6%.

There was a notable increase in technology-focused investment trusts, including Scottish Mortgage and Polar Capital Technology Trusts, which reacted well to a recovery in the world’s largest technology companies after a tough couple of weeks.

Scottish Mortgage’s 17% weighting in SpaceX led to a bout of volatility, but a 7% jump for SpaceX yesterday has helped stabilise Scottish Mortgage.

Polar Capital’s more diversified and dedicated approach to picking AI leaders means the trust’s share price is up over 50% since the start of the year, and investors seem to be using last week’s dip as an opportunity to buy into the stock.

Sainsbury’s was the standout corporate story on Tuesday, with a trading statement showing progress against tough comparables.

“Sainsbury’s is finding life a little harder as first quarter sales growth slows. It reported 2.1% like-for-like sales growth versus 4.7% in last year’s comparative period,” explained Dan Coatsworth, head of markets at AJ Bell.

“It’s not disastrous and the grocer is still striking a chord with both cost-conscious individuals and shoppers happy to spend a bit more on fancy items. Online grocery sales were notably strong, and Sainsbury’s continues to find ways to improve the in-store shopping experience.”

Sainsbury’s shares were 2% higher at the time of writing.

Celsius Resources (LON: CLA) has executed a binding sale agreement with Chinalco (Xiong’an) Mining Corporation for the disposal of 95% of the Opuwo cobalt copper project in Namibia for $15m. The mineral resource estimate is 225.5 million tonnes at 0.12% cobalt, 0.43% copper and 0.54% zinc. The disposal will allow Celsius Resources to focus on Philippine assets. The share price jumped 36.4% to 0.375p.

Sunda Energy (LON: SNDA) is acquiring New Zealand oil and gas producer Matahio, which owns four petroleum mining permits and one exploration permit on the North Island, and the approvals process is continuing. Completion could be in September. Overall average production for the first five months of 2026 is 1,036 barrels of oil equivalent per day. The first tranche of £1.25 of convertible loan notes was drawn down at the end of April. Sunda Energy has not drawn down the second tranche of £1.5m because of the stronger than expected oil price. The third tranche of £1.5m is still available. Sunda Energy is evaluating its option for the Production Sharing Contract TL-SO-19-16 in Timor-Leste following the receipt of a letter of notice of intention to terminate. The share price rebounded 25.7% to 1.4p.

Renalytix (LON: RENX) has published a real world data study for KidneyintelX risk stratification and that shows that better kidney protection and reduction of patient risk trajectories over 23 months. There were 29% of candidates that moved to a lower risk category while using the test, which helps to identify patients that require more intensive treatment. The share price recovered 21.1% to 2.3p.

RUA Life Sciences (LON: RUA) increased interim revenues by 6% to £2.7m. There was cash of £2.4m at the end of March 2026. The medical materials and devices developer could get near to breakeven for the full year. The spin out and deconsolidation of RUA Structural Heart is in progress and that will save £500,000 each year. The share price increased 7.04% to 19p.

FALLERS

Online retailer Huddled Group (LON: HUD) has raised £1.24m at 0.4p/share via subscription. A retail offer could raise a further £100,000. The cash will be spent on increasing stock levels and on marketing activity. Management believes that this should take the business to cash flow positive. The share price slumped 41.2% to 0.5p.

Precision diagnostic tests provider Oxford BioDynamics (LON: OBD) has appointed Richard Compton, who was boss of Oxford Nanopore technologies, as chief executive and executive chairman Iain Ross will become non-executive. Cash was £1.38m at the end of May 2026. In the first half the cash used in operating activities was £4.47m. Oxford BioDynamics has entered an agreement with MK Commercial to boost the sales presence in the US without the need to increase fixed costs. The share price declined 30% to 0.105p.

Blue Star Capital (LON: BLU) reported an increased pre-tax loss of £577,000, up from £108,000. The NAV was 5p/share at the end of March 2026. Since then, £250,000 was raised at 7p/share. Investee company SatoshiPay is building decentralised exchange platform Vortex. The share price slipped 21.7% to 4.5p.

Guardian Metal Resources (LON: GMET) says a pre-feasibility study for the Pilot Mountain tungsten project in Nevada shows a base case after-tax NPV of $660.3m. That is based on a tungsten price of $197,300 per tonne. The project is estimated to produce 15,916 tonnes of tungsten over eight years. The capital payback could be one year. The share price fell 9.09% to 200p.