𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

The FTSE 100 gave up early advances to close lower on Thursday as the oil price jumped once more amid the ongoing Middle East crisis.

“While images of war continue to roll across screens around the globe, and Iranian missiles and drones attack other countries, markets have little upon which to base a sustained rally,” said Chris Beauchamp, chief market analyst at IG.

The FTSE 100 index ended down 153.71 points, 1.5%, at 10,413.94.

The FTSE 250 closed down 196.47 points, 0.9%, at 22,700.20 and the Aim All-Share dropped 6.20 points, 0.8%, at 788.36.

Financial markets continued to be rattled by the Iran conflict, which entered its sixth day with seemingly no immediate prospect of resolution.

As inflation expectations increase on the back of rising energy costs, hopes for interest rate cuts diminish sending bond yields higher.

The yield on the US 10-year Treasury stretched to 4.15% on Thursday from 4.07% on Wednesday.

The yield on the US 30-year Treasury widened to 4.76% from 4.71%.

Central bank meetings are due in the US, UK, Europe and Japan in two weeks with policy makers now facing another dilemma, hot on the heels of another supply shock from tariffs.

On Thursday, Iran’s army said on it had launched a drone attack on a US site in the Iraqi Kurdistan city of Erbil, after targeting the headquarters of Kurdish forces with three missiles.

Meanwhile, AFP said residents in the Emirati capital Abu Dhabi reported hearing a series of loud explosions, with UAE air defences responding to a missile threat as Iran pressed on with its retaliation campaign in the Gulf.

Britain is sending additional fighter jets to Qatar amid the widening war in the Middle East, Prime Minister Keir Starmer announced on Thursday as his defence minister visited Cyprus.

The four Typhoon planes will join an existing UK squadron in the Gulf state “to strengthen our defensive operations in Qatar and across the region”, Sir Keir told reporters.

The announcement came after Defence Secretary John Healey arrived in Cyprus following a drone strike on a UK air base on the Mediterranean island earlier this week.

Brent oil traded higher at 84.41 dollars a barrel on Thursday afternoon, up from 80.75 dollars at same time on Wednesday.

“Oil prices remain elevated, and as things stand there’s no sign that either WTI or Brent looks set to reverse direction,” said David Morrison at Trade Nation.

“Oil has, perhaps more than any other market, been driven by headlines concerning the ongoing hostilities across the Middle East, particularly around the Strait of Hormuz,” he noted.

In European equities on Thursday, the Cac 40 in Paris closed down 1.5%, while the Dax 40 in Frankfurt declined 1.6%.

On Wall Street, markets fell.

The Dow Jones Industrial Average was down 1.6%, the S&P 500 index was 0.8% lower while the Nasdaq Composite dropped 0.6%.

The pound was lower at 1.3309 dollars on Thursday afternoon, down from 1.3365 dollars at the equities close on Wednesday.

The euro stood lower at 1.1574 dollars from 1.1634 dollars.

Against the yen, the dollar was trading higher at 157.67 yen, compared to 157.01 yen.

In London, alongside geopolitical developments, investors waded through a raft of earnings.

Rentokil Initial was the big winner on the FTSE 100, up 11%, as it reported better-than-expected growth in its key North American business.

The pest control specialist reported organic revenue growth of 3.6% in North America in the fourth quarter picking up from 3.4% in the third quarter, and allaying fears of a weather driven slowdown as flagged by industry peer Rollins.

“These results should reassure that Rentokil is on the right track, although the key spring/summer period will be proof of the pudding,” analysts at RBC Capital Markets said.

Insurer Admiral rose 7.6% as it hailed strong trading in 2025, hiking its dividend amid a profit rise.

The home and motor insurer booked £954.8 million in annual pre-tax profit, up 14% from £839.2 million on-year, while pre-tax profit from continuing operations rose to £957.9 million from £826.5 million.

Analysts at UBS noted the pre-tax profit outcome beat consensus of £944.0 million.

But Reckitt Benckiser fell 5.8% as it said the first quarter of 2026 would be hit by a weak cold and flu season and said trading in Europe remains challenging.

The consumer goods firm, which owns products such as Nurofen painkillers, Strepsils throat sweets and Dettol antiseptic, reported a strong end to 2025 with fourth quarter core like-for-like sales growth of 5.9%, ahead of 5.3% consensus.

A weak gold price put the brakes on Fresnillo, down 7.3%, and Endeavour Mining – which also reported results – down 5.8%.

Gold declined to 5,075.16 dollars an ounce on Thursday from 5,142.25 dollars on Wednesday.

While rising bond yields and worries of fewer interest rate cuts this year sent housebuilders into the red.

Persimmon fell 2.9% and Berkeley Group fell 2.4%.

Travel firms suffered once more.

Wizz Air fell 11% after warning late on Wednesday that ongoing disruption in the Middle East is expected to reduce its financial 2026 net profit by around 50 million euros, pushing earnings below its previous guidance.

British Airways owner IAG fell 3.6% and budget airline easyJet dipped 5.0%.

On the FTSE 250, Coats rose 8.8% as it raised mid-term targets for free cash flow and margins, while Harbour Energy soared 9.5% as it set out a new payout policy which could see the oil and gas producer return up to three quarters of its annual free cash flow to shareholders.

But PageGroup plummeted 15% as it reported a 67% drop in full-year pre-tax profit and halved its dividend.

The recruiter said the market outlook remains uncertain with the conversion of interviews to accepted offers remaining the “most significant area of challenge”.

The downbeat statement weighed on industry peer, Hays, down 3.8%.

The biggest risers on the FTSE 100 were Rentokil Initial, up 45.7p at 471.2p, Admiral Group, up 218.0p at 3,078.0p, Compass, up 71.0p at 2,306.0p, Relx, up 70.0p at 2,623.0p and Experian, up 70.0p at 2,755.0p.

The biggest fallers on the FTSE 100 were 3i, down 258.0p at 2,929.0p, Fresnillo, down 280.0p at 3,572.0p, Endeavour Mining, down 282.0p at 4,566.0p, Reckitt Benckiser, down 350.0p at 5,700.0p and Rio Tinto, down 403.0p at 6,787.0p.

Friday’s global economic calendar has US nonfarm payrolls, Halifax house price data in the UK and eurozone GDP figures.

Friday’s UK corporate calendar has full-year results from IMI.

– Contributed by Alliance News