Published by Global Banking & Finance Review®
Posted on March 4, 2026
2 min readLast updated: April 2, 2026
Add as preferred source on GoogleLondon’s FTSE 100 rebounded 0.7% on March 4 as heavyweight banks recovered amid Middle East turmoil, while homebuilders slumped due to leadership shifts and weak profit guidance.
March 4 (Reuters) - UK shares stabilized on Wednesday after a two-day slump fuelled by an escalating conflict in the Middle East, while shares of housebuilders slumped following mixed results and leadership changes at Barratt Redrow and Vistry.
Heavyweight lenders, which took a beating on economic concerns stemming from the war this week, led the recovery with HSBC, Standard Chartered and Barclays up about 2% each.
The FTSE 100 index closed 0.8% higher, having touched a two-week low in the prior session. The FTSE 250 midcap index firmed 0.9%, rebounding from a two-month low.
Despite continued military actions by Israeli and U.S. forces against Iran, prompting retaliatory strikes around the Gulf, investors found reassurance in U.S. President Donald Trump's promise of political risk insurance and financial guarantees for maritime trade in the Gulf.
Separately, a New York Times report said Iranian intelligence operatives indirectly reached out to the CIA for talks on ending the war, a day after the attacks.
Soaring energy prices due to the conflict, which has disrupted the Strait of Hormuz through which a fifth of the world's crude oil and liquefied natural gas passes, have stoked worries about global inflation.
Investors see a one-in-three chance the Bank of England will trim borrowing costs at its March 19 meeting, down sharply from roughly 80% seen late last week.
The latest survey showed UK's services sector grew robustly last month, while job cuts and price pressures persisted. That follows British finance minister Rachel Reeves' new economic and budget forecasts, which showed unemployment expected to increase further this year.
Housebuilders were a weak spot on Wednesday.
Barratt Redrow fell 3.1% after the UK's largest homebuilder said it had appointed Ventia CEO Dean Banks as its new chief executive, with David Thomas to retire after more than a decade at the helm.
Smaller peer Vistry's shares slumped 25.6% to the bottom of the midcap index after it warned profit margins would fall in 2026 and that CEO and executive chair Greg Fitzgerald was to retire.
(Reporting by Medha Singh and Sruthi Shankar in Bengaluru; Editing by Vijay Kishore and Chris Reese)
London stocks rebounded after falling due to Middle East conflict as heavyweight banks led the recovery, and investor sentiment was soothed by US political risk assurances.
Home builders' shares dropped on mixed company results, profit margin warnings from Vistry, and leadership changes at Barratt Redrow and Vistry.
The banking sector was key, with HSBC, Standard Chartered, and Barclays each rising about 0.9% during the session.
The conflict caused a sharp sell-off, pushing the FTSE 100 nearly 4% below its previous high due to concerns over energy prices and inflation.
Investors see a one-in-three chance that the Bank of England will lower borrowing costs at its March 19 meeting.
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