The FTSE 100 fell 161.71 points, or 1.6%, to close at 10,276.95 on Thursday as caution replaced the earlier burst of enthusiasm about a potential de-escalation in the Middle East, even as the oil price continued to slide.
The blue-chip index’s retreat contrasted with gains elsewhere in London. The FTSE 250 edged up 50.30 points, or 0.2%, to 22,882.72, while the AIM All-Share added 9.70 points, or 1.2%, to 818.32.
Middle East optimism gives way to reality check
The initial market rally fuelled by hopes of a swift end to the US-Iran conflict has cooled, according to analysts, as investors digested the complexities of securing a lasting peace deal. Susannah Streeter, chief investment strategist at Wealth Club, described the mood as one of tempering: “The wild streak of enthusiasm which hit markets amid hopes for a major de-escalation in the Iran conflict is tempering.” She added that there was “a realisation that there are more hurdles to climb for a longer-term resolution to be agreed, even though Iran is reported to be studying a US peace proposal aimed at formally ending the conflict.”
David Morrison, senior market analyst at Trade Nation, echoed that sentiment. He noted that after two sessions of strong gains following a sharp sell-off at the beginning of the week, “there’s been some evidence of profit-taking today.” He said investors appeared “to be expressing some caution and taking some risk off the table as yesterday’s euphoria on hopes of a quick end to the US/Iran war start to fade.” Morrison pointed to a reported one-page memorandum for ending hostilities as the most optimistic news in weeks, but cautioned that “it does look as if there are some high hurdles to jump for Tehran to accept.”
US President Donald Trump said an agreement could be near after positive talks, with Iran adding that it would pass on its latest position to mediator Pakistan. The prospect of a deal continued to weigh on crude prices. Brent crude for July delivery was trading at $97.76 a barrel on Thursday, down from $102.12 at the time of the London equities close on Wednesday.
European markets mirrored the cautious tone in London. The CAC 40 in Paris closed down 1.2%, and the DAX 40 in Frankfurt ebbed 1.0%.
Across the Atlantic, markets were mixed. The Dow Jones Industrial Average was down 0.2%, while the S&P 500 rose 0.1% and the Nasdaq Composite gained 0.5%. The yield on the US 10-year Treasury widened to 4.36% on Thursday from 4.35% on Wednesday, and the yield on the 30-year Treasury rose to 4.95% from 4.94%.
In currency markets, the pound firmed to $1.3616 on Thursday afternoon from $1.3602 on Wednesday. Sterling was little changed against the euro at €1.1567, while the euro traded higher against the dollar at $1.1768 from $1.1756. The dollar strengthened against the yen, trading at ¥156.41, up from ¥156.27.
Attention on Friday will turn to the closely watched US jobs report. Goldman Sachs estimates nonfarm payrolls rose by 70,000 in March, slightly above the consensus of 65,000. The broker expects a 32,000 boost from the end of worker strikes and a moderate tailwind from sequentially better weather after poor weather likely weighed on February payroll growth. On the negative side, Goldman expects a 5,000 decline in government payrolls, and it forecasts the unemployment rate held steady at 4.4% in March.
Company results and sector moves
In corporate news, JD Sports Fashion topped the FTSE 100 leaderboard, rising 7.4% as an improved free cash flow position offset a continued struggling sales performance. Deutsche Bank described the results as a “mixed bag,” with in-line full-year pre-tax profit, a sequential slowdown in like-for-like sales, and 2027 profit guidance around 4% below consensus at the midpoint. However, the bank highlighted a “welcome” free cash beat combined with a new capital return framework of growing dividends and a rolling £200 million share buyback.
Insurer Hiscox also performed well, rising 5.4% after reporting accelerating growth in its retail business and a positive outlook for 2026. Hiscox reported a 10.2% jump in first-quarter written premiums, driven by strong retail performance. Chief executive Aki Hussain said: “Hiscox is building on strong momentum delivered in 2025, through capturing diverse, high-quality growth opportunities across each of our businesses.”
The rising gold price lifted mining stocks for the second consecutive day. Fresnillo advanced 5.8% and Endeavour Mining rose 5.1%. Gold traded higher at $4,742.97 an ounce on Thursday, up from $4,692.73 on Wednesday.
On the downside, Relx fell 6.2%, dragged by both an ex-dividend adjustment and a downgrade from Morgan Stanley. The bank cut its rating on the information and analytics company to ‘equal weight’ from ‘overweight’. Relx’s ex-dividend date was 7 May 2026, with a dividend per share of $0.6228.
Shell declined 2.9% amid the fall in oil prices and as investors assessed its first-quarter results. The London-based oil major reported adjusted earnings of $6.9 billion, well ahead of consensus expectations. Shell raised its quarterly dividend by 5% from the prior quarter but trimmed its quarterly buyback to $3 billion from $3.5 billion.
On the FTSE 250, Helios Towers surged 14% after it raised guidance for 2026 adjusted earnings to reflect a “significant” tenancy pipeline amid “exceptionally strong” demand for data. The company reported adjusted EBITDA of $127.2 million for the first quarter, up 14% year-on-year, and increased its tenancy additions outlook. Chief executive Tom Greenwood said: “Demand for data and connectivity across Africa and the Middle East remains exceptionally strong, with our mobile operator customers accelerating investment, driving significantly increased demand for our infrastructure.”
The biggest risers on the FTSE 100 were JD Sports Fashion, up 5.00p at 73.00p; Fresnillo, up 201.00p at 3,663.00p; Hiscox, up 84.00p at 1,634.00p; Endeavour Mining, up 238.00p at 4,916.00p; and Autotrader, up 20.60p at 520.80p.
The biggest fallers on the FTSE 100 were Relx, down 163.00p at 2,462.00p; Admiral, down 181.00p at 3,165.00p; Centrica, down 10.80p at 198.70p; BAE Systems, down 97.70p at 1,991.80p; and Smiths Group, down 78.00p at 2,522.00p.
Friday’s global economic calendar includes the US jobs report with nonfarm payrolls, Canada unemployment figures, German trade and industrial production data, and the Halifax house price index in the UK. The local corporate calendar features full-year results from Airtel Africa.
