London close: Stocks drop into red after Iran gas field attack
By Benjamin Chiou
Date: Wednesday 18 Mar 2026
(Sharecast News) - London's blue chip stocks erased earlier gains to finish nearly 1% lower on Wednesday as a renewed surge in energy prices prompted investors to scale back their risk appetite.
The FTSE 100 finished down 0.94% at 10,305.29, nearly wiping out gains made over the preceding two days, after oil facilities across the Gulf were forced to evacuate.
The development followed Israel's attack on the South Pars gas field - the world's largest natural gas field that straddles Iran and Qatar - prompting Iran to warn countries around the Persian Gulf that a number of energy assets were now "legitimate targets". Brent was nearly 5% higher at $108.13 a barrel by the close, while European natural gas futures jumped over 6% to €54.88 per MWh.
"Iranian threats of retaliation against regional energy infrastructure after Israeli strikes on its massive South Pars gas field have helped dial up the temperature once again and put renewed upward pressure on oil prices," said AJ Bell's head of financial analysis Danni Hewson. "Any solution to the blockage of the Strait of Hormuz looks pretty distant at this point and unless and until there is progress on that front, energy markets will likely remain volatile."
Earlier in the day, oil prices had eased back on reports that Iraq had resumed crude exports to Turkey's Ceyhan port, as the Middle East producer looks to bypass the stricken Strait of Hormuz. According to multiple reports, crude is now being transported from Iraq's Kirkuk oil fields to Ceyhan via pipeline after Baghdad, the Kurdistan Regional Government and Ankara struck deals to enable flows to restart.
Also weighing on investors' minds was nervousness ahead of the Federal Reserve's policy meeting later on Wednesday, with markets waiting for any clues on whether renewed inflationary pressure - oil prices are currently at a four-year high - will prompt central bankers to stay hiking interest rates. For now, at least, the consensus prediction is that the Fed will stand pat on rates.
Diploma surges on guidance upgrade; Unilever falls
Diploma was the standout gainer on the FTSE 100, up 18% as it hiked full-year guidance on the back of robust first-half trading. The industrial group now expects annual organic revenue growth of 9% and an operating margin of 25%. It had previously forecast 6% growth in revenues and a 22.5% margin. Trading remained "very strong", it noted, making it confident for the second half.
Consumer goods giant Unilever was in the red following a Bloomberg report late on Tuesday that it's in the early stages of considering a spinoff of its food assets as it looks for ways to further streamline its sprawling portfolio.
Precious metals miner Fresnillo and gold miner Endeavour both lost their shine as gold prices slumped to a one-month low.
Insurer Prudential fell, reversing earlier gains even as it lifted its dividend and reported double-digit full-year profit growth.
On the FTSE 250, Moonpig jumped after the online greeting card group held full-year profit guidance, with adjusted earnings per share at the top end of forecasts, and announced a £65m share buyback.
Softcat surged as it lifted its full-year guidance following an "exceptional" first half. The company, which provides IT infrastructure products and services, now expects high single-digit growth in underlying operating profit for FY 2026, up from low single-digit previously.
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