Energy Surge Drives FTSE 100 as Inflation Eases Concerns

Energy shares buoyed Britain's FTSE 100, recovering from earlier losses, with a notable 2.7% climb in the energy sub-index. This followed a softer inflation print and potential easing of trade tensions between the U.S. and China. However, inflation concerns persist due to looming utility bill increases.

On Wednesday, energy shares propelled Britain's benchmark stock index upwards, buoyed by a softer-than-anticipated inflation report that improved investor sentiment.

The blue-chip FTSE 100 index climbed 0.3%, rebounding from initial declines, while the midcap index remained stable. The rise in the FTSE 100 followed Tuesday's rally, which was sparked by U.S. President Donald Trump's suggestions of possible exemptions from auto-related tariffs.

The energy sub-index surged 2.7% as oil prices edged up by around 1%, driven by optimism over potential trade discussions between China and the United States and reports of Iraq cutting oil production in April. Gold miners benefited from a rise in precious metal prices past $3,300 on safe-haven demand. Endeavour Mining topped the blue-chip leaderboard with a 6.3% increase, and Hochschild excelled on the midcap index with a 5.5% gain.

Bowing to pressure, Bunzl faced a record 25.3% plunge after revising its 2025 forecast and suspending its share buyback program. Retailer WH Smith dropped 1% following a modest first-half profit decline, although it maintained its full-year market outlook. In contrast, nanotechnology tools maker Oxford Instruments soared 7.7%, leading midcap performers, with an annual profit forecast meeting expectations.

In the economic backdrop, Britain's inflation dipped to a three-month low of 2.6% in March, yet experts caution that impending hikes in utility bills and employer taxes could elevate the rate to 3% in April. The Bank of England adopts a wary stance ahead of its forthcoming interest rate decision amidst potential U.S. tariff impacts.

(With inputs from agencies.)