FTSE 100 rebounds as oil slump hits BP and Shell

The FTSE 100 climbed on Tuesday after oil prices fell sharply, while BP and Shell both declined as crude retreated. On Wall Street the S&P 500 and Dow Jones closed slightly lower, while the Nasdaq edged higher and Centene dropped heavily after reiterating its profit outlook. Oracle jumped in after-hours trading following its latest earnings release. Currency markets saw the dollar ease while sterling traded around $1.345 and the euro strengthened.

Equities

The FTSE 100 closed higher on Tuesday, rising 1.6% and recording its strongest daily gain in almost a year after three consecutive sessions of declines. The FTSE 250 also advanced, finishing the session 1.8% higher. The rebound followed a sharp fall in global oil prices after comments from US President Donald Trump suggested that the conflict involving the United States, Israel and Iran could end sooner than previously feared.

Energy shares in London lagged the broader market despite the overall rally. BP closed 2.1% lower on Tuesday, while Shell finished the session down 0.8%, reflecting the steep fall in crude prices earlier in the day after oil dropped nearly 11%. The retreat in energy prices came even as Iran warned it could continue blocking oil exports from the Middle East if attacks against the country persist.

Elsewhere in the FTSE 100, housebuilder Persimmon ended Tuesday’s session 4.5% higher after management said it expects to deliver more homes in 2026. The company added that profits are likely to come in at the top end of current market expectations, which lifted sentiment around the sector. Domino’s Pizza Group also edged higher, closing 0.2% up on Tuesday as the company highlighted expansion plans centred on its new fried chicken brand, which it expects will support sales growth.

Attention in the UK has also shifted towards the upcoming Bank of England interest rate decision on 19 March. Analysts at Standard Chartered and Morgan Stanley have pushed back expectations for a rate cut until the second quarter, citing the risk that higher energy prices could keep inflation above the levels previously forecast by the UK’s fiscal watchdog.

On Wall Street, trading was mixed on Tuesday. The S&P 500 closed 0.21% lower while the Dow Jones Industrial Average slipped 0.07%. The Nasdaq Composite ended marginally higher, rising 0.01% by the closing bell.

Among individual companies, Centene fell more than 16% during Tuesday’s session after reiterating its 2026 profit outlook, a move that disappointed investors. Semiconductor stocks moved higher, with Nvidia closing 1.2% higher, while SanDisk gained 5.1% and Western Digital added 1.6%.

Technology shares were the only sector to finish higher within the S&P 500. Meanwhile, the S&P Software and Services index fell 1.7%, continuing a period of weakness linked to concerns about artificial intelligence disrupting parts of the industry.

After the closing bell on Tuesday, Oracle shares jumped more than 7% in extended trading after the company released its latest quarterly earnings report.

Forex & Commodities

The US dollar eased early on Wednesday as investors awaited clearer signals from developments in the Middle East conflict involving the United States, Israel and Iran. The euro moved higher to $1.163, recovering from a three-month low reached earlier in the week, while sterling also strengthened, trading around $1.345 against the dollar. The Japanese yen weakened to roughly ¥158.1 per dollar, remaining close to a seven-week low seen earlier this week.

The Australian dollar rose sharply during the past two sessions, climbing to about $0.7180, its highest level since mid-2022. The move followed remarks from Reserve Bank of Australia deputy governor Andrew Hauser, who indicated that rising oil prices could increase inflationary pressure and strengthen the case for an interest rate rise at the central bank’s policy meeting next week.

In commodities, spot gold edged up early on Wednesday to around $5198 per ounce as investors maintained demand for safe-haven assets ahead of the inflation data release. Oil prices were volatile after falling sharply on Tuesday. Brent crude traded around $88.39 per barrel and US West Texas Intermediate near $84.43 after reports that the International Energy Agency may coordinate a large strategic reserve release to ease supply pressures linked to disruptions around the Strait of Hormuz.