UK equities moved lower on Thursday as investors continued to assess developments surrounding the Strait of Hormuz and tensions between the US and Iran, while sentiment across wider European markets remained cautious.
The FTSE 100 was down 0.25% at 03:25 ET (07:25 GMT), while Germany’s DAX declined 0.45% and France’s CAC 40 edged 0.02% lower. Sterling strengthened slightly against the dollar, with GBP/USD rising 0.05% to 1.3613.
Attention remained firmly on the Strait of Hormuz after Axios cited two unnamed US officials as saying Washington has quietly operated a shipping corridor through the strategically important waterway for several weeks. According to the report, nightly convoys travelling along the Omani coast have been transporting around 10 million barrels per day, approximately half the volume seen before the conflict, with US air cover provided following a two-week operation targeting Iranian radar capabilities.
Separately, Iranian Foreign Minister Abbas Araghchi told his Mauritanian counterpart that Islamic countries should strengthen cooperation through the Organisation of Islamic Cooperation to “counter the Zionist regime’s plots,” according to Iran’s Mehr News Agency.
US President Donald Trump also addressed the Hormuz situation on Wednesday, expressing frustration that South Korea had declined to assist with securing the waterway despite obtaining “60%” of its oil from the region.
Trump separately said he expected to meet North Korean leader Kim Jong Un this year, commenting that Kim “likes me” in contrast with his predecessors.
Trump increases economic pressure on Iran
Washington intensified its economic campaign against Tehran late on Wednesday, with Trump announcing what he described as the “most crushing economic operation ever taken against any country”.
The president warned that countries supporting Iranian financial institutions, banks, airports or shipping registries could face “tremendous economic consequences.” Trump characterised the new campaign as “economic d-day.”
Araghchi responded on social media platform X, arguing that the announcement was intended to distract from economic challenges facing the US, including “unprecedented debt & surging interest costs”. He also accused Washington of “economic terrorism” and warned of consequences for the global economy and national sovereignty.
US Treasury buybacks offer support to risk sentiment
Investors were also digesting a US Treasury decision to at least double buyback operations at the longer end of the yield curve.
According to Jefferies strategist Mohit Kumar, the minimum size of operations covering the 10-to-20-year and 20-to-30-year segments will increase to $4 billion from $2 billion previously.
“We view yesterday’s announcement as a signal that Bessent is conscious of the long end yields and is ready to take steps to control the long end,” Kumar said in a note.
The announcement contributed to a six-basis-point decline in the 10-year US Treasury yield and initially supported gold and cryptocurrency markets as the dollar weakened.
Kumar said Jefferies remained “long gold” and continued “to see value over the medium term.” He also described Wednesday’s Federal Open Market Committee minutes as “less hawkish than feared,” noting that most policymakers expected inflation to moderate during the remainder of the year.
Oil rises as Hormuz uncertainty continues
Oil prices strengthened as traders monitored developments surrounding the key Middle Eastern shipping route. Brent crude advanced 1.4% to $92.91 a barrel, while WTI gained 1.33% to $85.52.
Gold prices moved in the opposite direction during Thursday’s trading. December futures slipped 0.03% to $4,544.65, while spot gold declined 0.78% to $4,487.88 an ounce.
UK company news
Hays (LSE:HAS) cut its full-year dividend by 65% and announced plans to withdraw from seven markets as subdued hiring conditions continued to weigh on permanent recruitment fees.
JD Sports (LSE:JD.) lowered its FY26/27 profit expectations after the decline in second-quarter sales accelerated, with weakness in North America proving a particular drag on performance.
Focus keyphrase: FTSE 100 US-Iran Hormuz tensions
Meta description: The FTSE 100 falls as investors monitor the US-Iran standoff over the Strait of Hormuz, while oil prices rise and UK corporate updates remain in focus.
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