British shares opened in negative territory on Thursday, with the FTSE 100 falling as concerns over recent developments in the Middle East continued to weigh on market mood. At 03:11 ET (07:11 GMT) the FTSE 100 had slipped 0.6%, Germany's DAX was down 0.4%, and France's CAC 40 was up 0.4%. Sterling traded lower, with GBP/USD down 0.1% at 1.3495.
The market backdrop remained dominated by an escalation of maritime tensions after Iran seized multiple vessels in the Strait of Hormuz earlier in the week. The United States has maintained a naval blockade on Iranian ports and continued operations targeting Iranian-linked shipping in regional waters, further restricting movement through the strait.
Activity through the Strait of Hormuz - responsible for roughly 20% of global oil flows - was described as severely constrained, and that disruption has supported higher crude prices. Brent crude rose 1.5% to $103.42 a barrel, while West Texas Intermediate gained nearly 1.6% to $94.48, driven by limited shipping activity and constrained supply.
Diplomatic prospects appeared fragile despite a separate development in which U.S. President Donald Trump announced an indefinite extension of the ceasefire. Washington has conditioned any agreement on the full reopening of the Strait of Hormuz, a demand Tehran has rejected while the blockade remains in place.
Iranian President Masoud Pezeshkian said Tehran remained open to dialogue but emphasised that "breach of commitments, blockade and threats" were the principal barriers to meaningful negotiations, reiterating Iran's position that current conditions do not permit genuine talks. Iranian officials also blamed Washington for the stalemate and warned reopening the strait would be "impossible" while military and economic pressure continued.
Those exchanges have left both sides at an impasse and have raised questions about the durability of the ceasefire, even though the truce has so far held beyond its initial term.
UK corporate updates
Within the London market, a number of companies updated the market on how the geopolitical situation and associated travel and trade disruptions could affect operations and profit guidance.
- London Stock Exchange Group said it now expects full-year revenue growth at the upper end of its 6.5%-7.5% forecast range after first-quarter income rose 9.8%. The company beat analyst expectations on strength in its data and analytics division. CEO David Schwimmer pointed to strong momentum and to ongoing rollout of artificial intelligence initiatives, while the group continues to face pressure from activist investor Elliott Management to improve valuation and performance.
- Sainsbury's warned that the Iran conflict could weigh on consumer demand and profits, and provided a 2026/27 underlying operating profit forecast of 975 million-1.08 billion pounds, noting that its higher exposure to non-food sales leaves it more vulnerable to a slowdown in discretionary spending despite a solid start to the year.
- WH Smith cut its full-year profit forecast to 90 million-105 million pounds and suspended its dividend. The retailer cited weaker passenger numbers and softer consumer confidence linked to Middle East travel disruptions, warning that airport sales are likely to suffer as higher jet fuel costs push up airfares. WH Smith said it is adopting a cautious outlook to preserve cash and strengthen its balance sheet.
- Asos said it is seeking refunds on 7 million pounds in U.S. tariffs as part of efforts to protect margins during its turnaround, after the levies were ruled illegal by the Supreme Court. The retailer, which is facing competitive pressure and weak demand, warned that broader geopolitical risks including the Iran conflict could further weigh on costs and consumer spending.
Additional market commentary
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Overall, trading opened with a cautious tone as commodity market movements and company-level earnings and guidance updates reflected the interplay between geopolitical risk and corporate performance. Energy markets reacted to the shipping constraints, while travel-exposed and non-food retail segments signalled vulnerability to reduced passenger numbers and weaker discretionary spending.