FTSE 100 edges lower as Middle East tensions weigh on sentiment

London's FTSE 100 slipped on Wednesday as investors remained cautious over escalating tensions in the Middle East.

Losses in precious metals miners outweighed gains in energy stocks, which benefited from a rise in oil prices.

By 10:13 GMT, the blue-chip FTSE 100 index had fallen 0.1% to 10,515.73 points.

The midcap FTSE 250 index also edged lower, declining 0.09%.

Precious metal miners lead sector losses

Precious metals miners emerged as the weakest-performing sector during the session, falling 2.3%.

Fresnillo dropped 2.8%, while Endeavour Mining declined 2%, placing both companies among the biggest losers on the benchmark index.

The sector's decline weighed on the broader market and offset strength seen elsewhere.

Energy stocks advance as oil prices climb

Energy shares rose 0.3% after oil prices climbed around 2%.

The increase followed renewed geopolitical tensions after US President Donald Trump reimposed a naval blockade on all Iranian ports.

Higher oil prices provided support for energy companies, making the sector one of the day's strongest performers.

Personal goods sector posts strongest gains

The personal goods index led sectoral advances, rising 2.4%.

Watches of Switzerland Group climbed 4.8% after Barclays and UBS both raised their target prices for the stock.

The brokerage upgrades helped lift sentiment across the sector.

OECD highlights UK's economic challenges

The OECD said Britain must maintain fiscal discipline, address rising pension costs, and tackle high energy prices to strengthen economic growth.

The organisation's comments underscored the economic challenges facing Andy Burnham, who is set to become prime minister next week.

On Tuesday, the FTSE 100 closed higher as banking stocks led gains following strong earnings from major US lenders, marking the start of the corporate reporting season.

Investor sentiment also improved after softer-than-expected US inflation data fuelled expectations of a delay in interest rate cuts.

Individual stocks in focus

Rio Tinto gained 1.1% after the mining company reported better-than-expected second-quarter iron ore sales.

The company attributed the performance to strong operational execution.

Discount retailer B&M was among the biggest fallers, with its shares dropping 6.9%.

The company reported a 2.3% decline in first-quarter like-for-like sales in its core UK market.

It said a slow start to the gardening season weighed on trading, although growth in France helped increase overall group revenue.

Meanwhile, housebuilder Barratt Redrow advanced 3.3% after announcing plans to return £400 million ($536 million) to shareholders through share buybacks instead of dividends.

The market remains cautious

Overall, London's equity market traded slightly lower as investors balanced the impact of escalating geopolitical tensions against company-specific developments and sector performance.

While higher oil prices lifted energy stocks, declines in precious metals miners limited gains across the broader market.

Investors also continued to monitor corporate earnings and economic developments, with attention remaining on fiscal policy and growth prospects in the UK.