Energy shares lead FTSE 100 higher

The blue-chip FTSE 100 was 0.2% higher, while the midcap FTSE 250 index was 0.6% lower

The UK's benchmark FTSE 100 stock index edged higher on Wednesday, led by energy shares as oil prices jumped on concerns over tensions in the Middle East, though investors were cautious as they assessed the risk of escalating conflict.

The blue-chip FTSE 100 was 0.2% higher, while the domestically focussed midcap FTSE 250 index was 0.6% lower.

Heavyweight oil and gas shares gained 1.6%, ending at their highest in more than a week, as oil prices gained on concerns that crude output from the Middle East could be impacted amid escalating conflict in the region.

Still, most investors appeared to avoid panic selling.

Overall I'd say market reaction has been pretty muted. You saw some safe haven buying yesterday but a lot of that's being given back today, according to Richard Flax, chief investment officer at Moneyfarm.

Oil prices have gone up but are still sitting at almost $70-ish a barrel, there's a lot of things where you'd think markets would be pricing in a lot more geopolitical tail risk than they seem to be.

The aerospace and defence index added 0.3%.

The industrial metal miners added 1.2% on higher copper prices, buoyed by brighter demand prospects after China's stimulus measures.

Insurer Prudential topped the FTSE 100, gaining more than 4%. Banking stocks added 0.7%.

The automobiles and parts index led sectoral declines, down 2.8% and closing at an almost two month low, as Aston Martin lost more than 7%, extending declines for a third successive session.

Among single movers, JD Sports Fashion skidded 6.1% to the bottom of FTSE 100 after not updating its annual guidance despite beating the market outlook for first-half profit, and as shares of Nike, whose shoes it retails, plunged.

Elsewhere, pay settlements awarded by British employers held at their lowest in two years in the three months to August.