FTSE 100 Falls as U.S.-Iran Tensions and Weak China Data Spook Investors

European stock markets fell on Wednesday, with the UK's FTSE 100 leading losses, as investors reacted to an escalating military conflict between the United States and Iran and weaker-than-expected economic growth data from China.

By 03:18 ET (07:18 GMT), the benchmark FTSE 100 index was down 0.60%. Elsewhere in Europe, Germany’s DAX dropped 0.90% and France’s CAC 40 slipped 0.28%, reflecting broad-based risk aversion across the region.

Geopolitical Tensions Drive Oil Higher

Investor sentiment soured amid a fourth consecutive night of U.S. military action against Iran. U.S. Central Command confirmed it had conducted strikes against Iranian military targets near the Strait of Hormuz and reinstated a naval blockade on vessels in Iranian ports. The conflict appeared to widen after the UAE Ministry of Defence confirmed two of its tankers were struck by Iranian cruise missiles.

The escalating confrontation directly impacted energy markets, with traders pricing in a higher risk premium for potential supply disruptions. Brent crude, the international benchmark, rose 1.4% to $85.90 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 1.2% to $80.32.

Weak China Data Weighs on Miners

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Adding to the cautious mood, new data showed China’s economic recovery is faltering. The National Bureau of Statistics reported that the economy grew by 4.3% year-on-year in the second quarter, missing a Reuters poll forecast of 4.5% and slowing from 5% in the prior quarter.

The slowdown is a significant headwind for the FTSE 100's materials sector, as China is the world's largest consumer of industrial metals. Shares in major mining companies reflected the concern, with Antofagasta falling 2.0% and Rio Tinto declining 0.36% in early trade.

Corporate Movers

In UK corporate news, several companies reported trading updates that influenced their share prices:

• Barratt Redrow announced it delivered fiscal 2026 home completions at the upper end of its guidance and planned a £400 million share buyback for the next fiscal year.
• B&M reported a 2% rise in first-quarter group revenue, though this was driven by its French and Heron Foods divisions, which offset weaker like-for-like sales in its core UK business.
• Antofagasta maintained its full-year production forecast despite reporting a 9.5% year-on-year drop in first-half copper production.