The FTSE 100 closed up 32.78 points, or 0.3%, at 10,461.63 on Wednesday, driven by strong gains in property and housebuilding stocks.
UK warehouse landlord Segro (SGRO.L) surged 17% after its board rejected a £12.6 billion takeover proposal from US logistics property giant Prologis (PLD).
Segro said the offer “falls a long way short” of its own assessment of the company’s value and described the approach as “opportunistically timed.”
Shore Capital analyst Andrew Saunders characterised the bid as “underwhelming,” saying it looked “highly inadequate in our view and not surprisingly has been rejected by the Segro board.”
Saunders added that shareholders “should demand a far better offer from Prologis for it to be taken seriously and control to be ceded.”
The rejected bid lifted the wider property sector, with Tritax Big Box REIT rising 6.4% and both British Land and Land Securities gaining 4.1%.
A fall in UK gilt yields also supported property and housebuilding stocks, with the 10-year yield dropping to 4.69% from 4.75% the previous day, continuing a decline from above 5.0% during the recent Middle East conflict.
Housebuilders Barratt Redrow and Persimmon rose 6.6% and 5.8% respectively, with Berkeley Group providing further sector support after reporting full-year profit slightly ahead of guidance.
In Germany, Rheinmetall plunged 19% after the German defence ministry confirmed it had scrapped a multibillion-euro order for six F126 anti-submarine frigates that had originally been placed with Dutch group Damen Naval.
The ministry said it “decided not to proceed with the construction of a total of six F126-class frigates,” citing “significant delays affecting the project,” and will now order eight smaller ships from German contractor TKMS instead.
JPMorgan analyst David Perry said the news represented a major setback for Rheinmetall and means the firm will likely miss its order intake target for the second quarter of 2026 and the full year.
Oil prices fell sharply as shipping traffic through the Strait of Hormuz recovered, pushing Brent crude below 75 dollars a barrel for the first time since the start of the Middle East war.
Brent crude for August delivery traded at 73.45 dollars a barrel on Wednesday, down from 77.10 dollars on Tuesday, as easing geopolitical tensions weighed on energy markets.
JPMorgan analyst Natesha Kaneva said: “While the magnitude and duration of the oil shock evolved broadly as expected, the market has rebalanced through a meaningfully different mix of demand losses and inventory withdrawals than we initially assumed.”
Gold also retreated sharply, with Tony Sage of Critical Metals Corp noting that expectations of tighter US monetary policy, compounded by a firm dollar, continued to weigh on bullion.
The US Federal Reserve is expected to raise interest rates twice this year, a trajectory that has reinforced downward pressure on gold, Sage said, with the metal trading at 4,014.40 dollars an ounce, down from 4,134.67 dollars on Tuesday.
Falling commodity prices dragged BP and Shell lower by 3.7% and 1.9% respectively, while Glencore, Anglo American and Fresnillo slid between 2.5% and 2.8%.
On the FTSE 250, B&M European Value Retail soared 13% after naming Atheeq Akbar, currently vice president of commercial finance at Asda, as its new chief financial officer.
Broker Peel Hunt described the hire as “a solid appointment, forming part of a broader overhaul of the finance function,” noting that Akbar’s start date of February next year “is not ideal, although good people usually come with a decent wait.”
Gamma Communications fell 5.4% after Providence Equity Partners withdrew from a consortium that had been considering a takeover bid, with consortium partner Epiris saying it “is continuing to consider its options.”