Wednesday Morning Markets: FTSE 100 Tumbles as US-Iran Escalation Sends Oil Higher 

European markets are trading lower on Wednesday as the latest US-Iran escalation rattled investors. 

The FTSE 100 has fallen 1.3% and the FTSE 250 has dropped 0.9%, while continental markets fared worse, with the DAX sliding 2%, the CAC 40 losing 1.6% and the Stoxx 50 decreasing by 1.5%. 

The sell-off follows US strikes on Iranian targets overnight and Tehran’s retaliatory claims against American military sites, with Washington also revoking Iran’s oil sanctions waiver after tanker attacks near the Strait of Hormuz.

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Unsurprisingly, oil prices spiked, with Brent crude up 5.1% to $77.97 a barrel. 

That has lifted Shell (+0.76%) and BP (+1.95%), with both names benefiting from the risk premium now baked into crude.

The latest Middle East escalations have pushed gold lower, with the yellow metal down 1% at $4,065 so far on Wednesday.

Away from geopolitics, Vistry Group plunged after warning of an approximately £30m first-half pre-tax loss, driven by aggressive cash-generation actions including deeper pricing discounts and one-off impairments. 

The blow was compounded by the surprise departure of CFO Tim Lawlor. 

Meanwhile, Jet2 moved the other way, jumping on record annual passenger numbers and a new £250m buyback, even as profit before tax slipped 7%.

IG Group fell 2.31% after proposing a new Jersey-incorporated holding company alongside its trading update, unsettling some investors despite double-digit revenue growth.

Babcock (-3.80%), Melrose (-2.60%) and Games Workshop (-2.50%) lead the fallers. 

In the FTSE 250, RIT Capital Partners (+3.96%) and Harbour Energy (+1.95%) lead the risers, the latter helped by the oil spike. 

Breedon Group (-6.06%) and QinetiQ (-4.59%) have joined Vistry among the session’s sharpest fallers.

On the economic calendar, investors will be watching for the FOMC minutes release this evening.