By Barbara Kollmeyer, MarketWatch
London stocks struggled for traction on Wednesday as investors watched a tense geopolitical standoff after Iran targeted U.S. troops with missile strikes, days after American airstrikes killed a key Iranian general.
The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -0.28% traded flat at 7,579.80, while the pound was unchanged at $1.3119.
Iranian state TV said the missiles were fired in retaliation for the death of Revolutionary Guard Gen. Qassem Soleimani, who was killed in an American drone strike last week. Fears of a wider Middle East conflict initially caused oil prices /zigman2/quotes/209723049/delayed CL00 +1.16% to climb, U.S. stock futures to tumble and gold prices to surge, though those moves eased back as London’s morning progressed. U.S. stock futures inched higher ahead of Wall Street’s open.
“Much of this market serenity is owed to both sides signaling they don’t want to escalate matters any further,” said Marios Hadjikyriacos, investment analyst at XM, in a note to clients. President Donald Trump said on Twitter that he would make a statement early on Wednesday.
Elsewhere, Bank of England Governor Mark Carney said in an interview with the Financial Times that he’s worried central banks don’t have enough tools to fight a sharp downturn. Carney is due to be replaced by Andrew Bailey later this year,
Banks were proving a main drag for shares, with HSBC Holdings /zigman2/quotes/208272822/composite HSBC +0.99% /zigman2/quotes/203901799/delayed UK:HSBA +0.81% down 1.1% and Lloyds Banking Group /zigman2/quotes/202285510/delayed UK:LLOY +3.87% falling 1.3%. Shares of consumer goods group Unilever /zigman2/quotes/205449809/delayed UK:ULVR -2.00% fell 1.3%.
Among the biggest moving shares, NMC Health plunged more than 15% on Wednesday after two controlling shareholders in the health care group sold shares worth almost $500 million to cover their debts, weeks after U.S. short seller Muddy Waters raised questions about the group’s finances.
The two businessmen also said they would sell a stake of approximately $75 million in FTSE-listed payments and foreign exchange platform Finablr /zigman2/quotes/211632366/delayed UK:FIN 0.00% . Shares of Finablr tumbled 17% in London trading.
Shares of Anglo American /zigman2/quotes/201381512/delayed UK:AAL +2.10% stock fell 0.9% on Wednesday as the mining giant said it was considering a £386 million ($506.7 million) bid to buy troubled fertilizer miner Sirius Minerals. Shares of London Stock Exchange-listed Sirius jumped 34%.
Shares of Sainsbury’s /zigman2/quotes/206038250/delayed UK:SBRY -1.74% fell 0.7% after the retailer reported like-for-like sales excluding fuel fell 0.7% in the 15 weeks ended January 4. “In what amounts to a contest to be the best of a bad bunch, industry data shows Sainsbury’s performed least worst out of the ‘big four’ groceries firms during Christmas,” said Russ Mould, investment director at AJ Bell, in a note to clients.