FTSE 100 slips as miners weigh; Middle East oil risk rises

London's FTSE 100 index fell on Wednesday, weighed down by declines in mining stocks, while rising geopolitical tensions in the Strait of Hormuz lifted oil prices and added to broader market caution.

The blue-chip index slipped 0.3% by midday trading, with shares in Rio Tinto and BHP Group, two of the index's largest miners, declining 1.2% and 1.1% respectively. The losses extended a recent pullback in the sector amid softer commodity prices and investor concerns over global demand.

Oil prices rose as tensions in the Strait of Hormuz intensified, a critical chokepoint for global crude shipments. Brent crude futures climbed 1.3% to $82.45 per barrel, while U.S. West Texas Intermediate (WTI) futures gained 1.1% to $78.75 per barrel. The increases followed reports of heightened military activity in the region, raising risks to supply routes.

The FTSE 100's decline contrasted with gains in other European benchmarks, such as Germany's DAX and France's CAC 40, which edged higher as investors balanced commodity sector weakness against broader European economic optimism. The pound sterling held steady against the dollar, trading near $1.2750.

Analysts attributed the FTSE 100's underperformance to its heavy exposure to global commodities and emerging markets, which have come under pressure from a stronger dollar and concerns over China's economic slowdown. The index remains down 2.1% for the month to date, lagging behind its European peers.

The Bank of England is scheduled to announce its next policy decision on Thursday, with markets pricing in a 25-basis-point interest rate cut. Investors will be closely monitoring the decision for signals on the central bank's inflation outlook amid mixed economic data from the UK.

The FTSE 100's retreat underscores the sensitivity of the index to both commodity price movements and geopolitical risks, as investors navigate a landscape of elevated uncertainty.