The FTSE 100 edged lower by Thursday lunchtime, as investors were left unimpressed by Donald Trump’s latest update on the Iran conflict and the lack of any clear resolution.
The FTSE 100 fell 0.5%, holding up better than the FTSE 250, which dropped 1.1% as broader risk appetite weakened.
Markets had been looking for clarity, instead, they got more noise. Trump said the US was “very close” to achieving its goals, while warning Iran could be pushed “back to the Stone Ages” within weeks. Iran responded with missile strikes on Tel Aviv and fresh threats of escalation.
That back-and-forth has left investors stuck in limbo.
Oil majors limit the damage
Despite the weaker tone, the FTSE 100 avoided sharper losses thanks to its heavyweight energy names.
BP led the index, up 4.5%, while Shell gained 3.3%. Centrica also moved higher, alongside defensive names like British American Tobacco and National Grid.
The driver was crude. Brent oil climbed to $108.57 a barrel, up sharply from the previous session, as supply concerns intensified.
Rising energy costs are already feeding through to the real economy. Bank of England data showed UK firms expect to increase prices more quickly as they absorb higher input costs linked to the conflict.
Miners fall back as sentiment shifts
The tone was very different for precious metal miners, which slipped after recent gains.
Fresnillo and Endeavour Mining both dropped 4.8%. On the FTSE 250, Pan African Resources and Hochschild Mining fell 6.6%.
It’s a sign that even traditional safe havens aren’t immune when positioning gets crowded and volatility picks up.
Small caps
Away from the main indices, moves were more extreme.
BSF Enterprise shares doubled after unveiling a luxury handbag made from lab-grown “T-Rex Leather”, developed using fossil material from Tyrannosaurus rex bones. The one-off piece will be auctioned following a museum exhibition.
At the other end, Speedy Hire slumped 13%. The firm warned trading conditions deteriorated through its fourth quarter, citing UK budget uncertainty and the impact of the Middle East conflict. It now expects annual earnings to come in below last year.
Global markets under pressure
The cautious mood wasn’t limited to London.
In Europe, the CAC 40 fell 1.1% and the DAX 40 dropped 1.7%. US futures pointed to a weaker open, with the S&P 500 and Nasdaq Composite both under pressure.
Bond markets also reflected the shift in sentiment, with US Treasury yields pushing higher.
Until there’s a credible path towards de-escalation, markets are likely to remain choppy, with energy stocks doing the heavy lifting and everything else struggling to find direction.