UK equities traded modestly higher on Thursday, with investors showing resilience despite a second night of U.S. military strikes against Iran and retaliatory attacks across the Gulf. Market attention also remained firmly focused on the European Central Bank, which is due to announce its latest interest-rate decision later in the day.
The FTSE 100 advanced 0.49% by 03:25 ET (07:25 GMT). Elsewhere in Europe, Germany’s DAX slipped 0.11%, while France’s CAC 40 gained 0.41%. Sterling strengthened 0.14% against the U.S. dollar to trade at $1.3388.
Energy markets were relatively stable despite the geopolitical tensions. Brent crude traded broadly unchanged at around $93 per barrel, while WTI crude held near $90.01 per barrel. Gold prices continued to attract safe-haven flows, with spot gold rising 0.90% to $4,107.87 per troy ounce.
Middle East Conflict Remains Key Market Risk
Geopolitical developments continued to dominate investor sentiment after U.S. President Donald Trump warned Iran that it would “pay the price” for delays in negotiations over a nuclear agreement.
The warning followed confirmation from U.S. Central Command (CENTCOM) that American forces had carried out a second consecutive night of strikes targeting Iranian military surveillance infrastructure, communications systems and air defence positions.
“U.S. Marine Corps, Air Force, and Navy assets fired precision munitions on Iranian targets that posed a threat to U.S. forces and international commercial ships transiting regional waters,” CENTCOM said in a statement.
Speaking to Fox News, Trump said the U.S. military had launched 49 Tomahawk missiles against a series of targets, including locations approximately 40 miles from Tehran. He also suggested that additional military action could follow should Iran reject a proposed agreement.
Iran responded with missile attacks across the region. The Islamic Revolutionary Guard Corps said it had launched 12 ballistic missiles at Jordan’s Al-Azraq Air Base and claimed to have targeted U.S. military facilities in Kuwait and Bahrain.
Authorities in Bahrain activated air raid sirens and confirmed that air defence systems had intercepted incoming aerial threats. Local officials reported that an 11-year-old girl sustained minor injuries from falling debris. Kuwait temporarily suspended air traffic before subsequently reopening its airspace.
During a visit to CENTCOM headquarters in Tampa, Florida, U.S. Defence Secretary Pete Hegseth said intelligence gathering and targeting efforts during the ceasefire period had advanced “in a way that are far, far beyond even the beginning of Operation Epic Fury.”
Iran’s Khatam al-Anbiya Central Headquarters claimed that the Strait of Hormuz had been closed to oil tankers and commercial vessels. CENTCOM disputed the assertion, stating that commercial ships were “continuing to transit in and out of the Strait of Hormuz.”
Andreas Lipkow, Chief Market Analyst at CMC Markets, said developments in the region “continue to represent the dominant external risk factor for financial markets,” adding that “the situation in the Middle East remains complex and uncertain.”
Meanwhile, U.S. Vice President JD Vance suggested that Washington and Israel were not always fully aligned on strategy. Speaking to CBS News, he said Israeli Prime Minister Benjamin Netanyahu had “certainly gotten some things wrong” in his handling of the Iran crisis.
UK Corporate Highlights
Primark strengthened preparations for its planned separation from Associated British Foods (LSE:ABF) by appointing Lucy Slinger as chief financial officer, enhancing the retailer’s leadership team ahead of its expected standalone future.
Intertek Group (LSE:ITRK) announced that EQT has been granted until 18 June to decide whether to proceed with a formal £9.4 billion takeover offer, potentially paving the way for one of the largest UK private equity transactions in recent years.
Wizz Air (LSE:WIZZ) reported annual operating profit of €139.7 million, exceeding market expectations despite disruptions linked to tensions in the Middle East. However, the airline declined to provide guidance for the 2027 financial year, citing continued uncertainty surrounding the operating environment.
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