Stock markets extend gains

The blue-chip FTSE 100 index added ​0.13% to 10,505.01 points, gaining for the eighth straight session

UK stock markets ended higher on ‌Wednesday as hopes of a resolution to the Iran war pushed down crude prices and lifted risk appetite, with upbeat updates from Pets at Home and Hollywood Bowl driving gains in the midcap index.

The blue-chip FTSE 100 index added ​0.13% to 10,505.01 points, gaining for the eighth straight session. The midcap FTSE 250 rose 0.25%, ​after hitting its highest in nearly three months during the session.

Rolls-Royce added 2.9%, while ​the defence sub-index rose 1.2%.

Easing bets of rate hikes in the UK have helped prop up the domestic share rally with the FTSE 100 now within 4% of its late-February record high.

Traders have priced in one quarter-point interest ​rate increase by the Bank of England before the end of the year with a 50% ​chance for another similar-sized move.

The most up-to-date figures of UK consumer behaviour showed British grocery inflation dropped to 3.1% in ‌the ⁠four weeks to May 17, its slowest rate of rise since December 2024, with the full impact of the Iran war yet to reach supermarket prices.

The UK’s political situation is likely to keep long-term rates elevated because all potential candidates to lead the Labour Party would likely propose a change ​in economic policy priorities, ​said Ryan Sweet, chief ⁠global economist at Oxford Economics.

Shell and BP declined nearly 2.3% and 2.7%, respectively, tracking a slide in oil prices as traders assessed progress in U.S.-Iran talks.

Hollywood Bowl climbed around 15.4% to the top of the FTSE 250 index after ​the leisure ⁠bowling operator reported higher spend per game in both the UK and Canada, and announced a new £5 million share buyback.