FTSE 100 Snaps Seven-Day Winning Streak as US-Iran Hostilities Rattle Markets
Britain’s benchmark FTSE 100 index fell on Thursday, snapping a seven-day winning streak as renewed hostilities between the United States and Iran weighed on investor sentiment and clouded hopes of reopening the Strait of Hormuz. The blue-chip index fell 0.8% to 10,418.33 points by 1013 GMT, while the domestically focused FTSE 250 also slipped 0.4%, easing from a near three-month high. TradingView
Reports of new US military strikes on an Iranian base, along with Kuwaiti claims of missile attacks, shattered earlier market optimism surrounding a possible peace agreement. The escalation pushed oil prices higher by almost 4%, dragging major European markets lower. The Sunday Guardian
The Geopolitical Trigger
Investor sentiment weakened after Iran and the United States exchanged air strikes, underlining the fragile nature of negotiations aimed at stabilising the ceasefire that took effect in early April. Markets had recently been supported by hopes that the Strait of Hormuz, a key route for global energy supplies, could eventually reopen. TradingView
Iran’s Revolutionary Guard sharpened its language overnight, issuing a warning that it would “extend the war beyond the region” if the United States launched another military strike on Iranian territory. Iran’s foreign minister issued a parallel warning that any return to full-scale war “will feature many more surprises.” Those statements registered across oil markets before filtering through into equities. Foreign Policy Journal
Later in the session, sentiment showed signs of partial recovery. Brent crude fell back to $95 a barrel — its lowest in over a month — after reports emerged that Trump was sharing a proposed deal with other allies ahead of giving his formal backing. Pakistan’s foreign minister was also reported to be flying to Washington to meet US Secretary of State Marco Rubio, with some outlets describing the trip as an attempt to accelerate negotiations. Proactiveinvestors UK
The latest draft deal in circulation included the Strait of Hormuz being opened to commercial shipping, the US lifting its blockade of Iranian ports, and Iran gaining access to assets frozen under previous sanctions, according to reports. Proactiveinvestors UK
Stock Movers: BT Leads Losses
BT slumped approximately 4.7%, leading losses on the FTSE 100, after a report said the British government will oppose any attempt by Indian billionaire Sunil Bharti Mittal to increase his stake in the telecoms group. Global Banking and Finance
Energy and defence stocks were the only bright spots on the index. Babcock International Group rose 1.9% and BAE Systems gained 1.6%, with defence shares climbing as the US-Iran ceasefire came under renewed pressure. Global Banking and FinanceLSE
PPHE Hotel Group was the standout performer across the broader market. PPHE Hotels surged 25%, rising to 2,015 pence, after Tel Aviv-based Fattal Hotel made a proposed £930 million takeover approach priced at 2,200 pence per share — approximately 47% above PPHE’s level before the company launched a strategic review last November. PPHE’s board concluded the proposal represented “fair value” and formed an independent committee to oversee discussions. Proactiveinvestors UK
IQE reported full-year results showing wider losses alongside improved trading in the second half of its financial year, and confirmed the completion of an £81 million fundraising in which US semiconductor company Macom took a strategic stake. Revenue fell 18% and pre-tax losses widened to £37 million, though the company said conditions improved during the second half and guided for top-line growth of more than 20% in the current year, supported by demand from optical interconnects used in AI infrastructure. Proactiveinvestors UK
BP’s recently dismissed chairman Albert Manifold also attracted attention on Thursday, saying he disputed entirely the characterisation of his conduct following his abrupt departure from the oil major. “In my 40-year working career, I have never once had accusations made against me such as those made in recent days,” Manifold said in a statement. BP had announced on Tuesday that Manifold left with immediate effect, eight months into the role, following what the company described as serious concerns about governance standards, oversight and conduct. Proactiveinvestors UK
Regional and Global Impact
Crude oil prices have stayed close to four-year highs due to unresolved US-Iran tensions, increasing fears that inflationary pressure may return in the second half of 2026. The FTSE 100 is particularly sensitive to energy developments given the weight of oil majors Shell and BP within the index. The Sunday Guardian
UK inflation eased to 2.8% in April 2026, down from 3.3% earlier in the year. Any renewed surge in energy prices risks reversing that trend and complicating the Bank of England’s rate path. The Sunday Guardian
Background
The Strait of Hormuz crisis began on 28 February 2026 when the US and Israel launched a coordinated assault on Iran, triggering a US naval blockade and a global fuel crisis. At least 17 merchant ships have been damaged in the strait, seven of which were abandoned, and 12 seafarers have been killed or reported missing. A ceasefire took effect in early April, but fresh exchanges of strikes on Thursday demonstrated how quickly that arrangement can break down. The FTSE 100 has been volatile since the war began in late February, though the index crossed the symbolic 10,000-point level for the first time in its history on the first trading day of 2026. Wikipediatradingeconomics
What Happens Next
Pakistan’s foreign minister is travelling to Washington to meet Secretary of State Rubio, in what some media have described as an effort to speed up Iran ceasefire negotiations. The outcome of those talks could directly influence market sentiment in the days ahead. Under the framework currently being discussed, commercial shipping in the Strait of Hormuz would return to pre-war levels within 30 days of any agreement, with negotiations on the future of Iran’s nuclear programme — including its stockpile of highly enriched uranium — envisaged to run for up to 60 days. Whether Trump formally backs the draft deal remains unconfirmed as of Thursday’s close. Proactiveinvestors UKProactiveinvestors UK
