London stocks opened slightly weaker on Thursday as investors weighed conflicting signals surrounding ongoing negotiations between the United States and Iran, despite increasingly optimistic comments from U.S. President Donald Trump regarding the possibility of a diplomatic agreement.
By 07:14 GMT, the FTSE 100 had fallen 0.28%, while European markets showed a firmer tone, with Germany’s DAX rising 0.20% and France’s CAC 40 gaining 0.41%. Sterling was broadly stable against the dollar, with GBP/USD up 0.18% at 1.3621.
Trump signals optimism over potential Iran agreement
Market sentiment was influenced by comments from President Trump, who told reporters at the White House that discussions with Tehran over the previous 24 hours had been “very good” and that reaching a deal remained “very possible.”
In later remarks to PBS, Trump said he believed an agreement could potentially be finalised before his scheduled visit to China next week, although he warned that military action could resume if negotiations fail.
Iran’s Foreign Ministry stated that no formal response had yet been delivered to Washington’s latest proposal, with diplomatic communication continuing through Pakistani mediators.
Reuters, citing both a Pakistani source and an individual briefed on the talks, reported that the two sides were nearing agreement on a short memorandum aimed at formally ending the conflict. Meanwhile, Axios reported that a proposed 14-point framework included commitments from Iran not to pursue nuclear weapons development and to suspend uranium enrichment activities for at least 12 years.
Iranian officials issue warnings amid ongoing talks
Despite the diplomatic progress, tensions remained elevated. A senior official from the IRGC Navy warned that any renewed US military action would trigger a response “beyond the enemy’s calculations.”
Iran’s parliamentary speaker also criticised Washington’s strategy around the Strait of Hormuz, describing it as “Operation Trust Me Bro” and claiming the approach had failed.
UK market movers and corporate updates
JD Sports warns on profits
JD Sports (LSE:JD.) said profits are expected to decline further in the 2026/27 financial year, citing subdued consumer demand and uncertainty linked to Middle East tensions. The retailer also reported a 2.3% decline in first-quarter like-for-like sales.
BAE Systems maintains strong outlook
BAE Systems (LSE:BAE) reiterated guidance for earnings growth of between 9% and 11% in 2026 as elevated geopolitical tensions continue to support defence spending and order activity. The company’s order backlog has expanded significantly since Russia’s invasion of Ukraine in 2022.
M&G returns to positive inflows
M&G (LSE:MNG) reported £600 million of net inflows during the first quarter, reversing outflows recorded a year earlier. Demand from Japanese partner Daiichi Life and external institutional clients supported the improvement.
Hiscox posts premium growth
Hiscox (LSE:HSX) announced a 10.2% increase in first-quarter insurance contract written premiums, driven by strong retail insurance performance across the UK, Europe and the United States.
IHG beats expectations despite regional risks
InterContinental Hotels Group (LSE:IHG) exceeded market forecasts with first-quarter RevPAR growth of 4.4%, ahead of expectations for 3.3%. Strong US leisure demand supported performance, although management warned that Middle East tensions could affect future travel activity.
Shell beats earnings forecasts
Shell (LSE:SHEL) reported first-quarter adjusted earnings of $6.92 billion, ahead of analyst expectations of $6.36 billion. However, the company reduced its quarterly share buyback programme to $3 billion from $3.5 billion and noted a higher debt ratio following conflict-related disruption at its Pearl gas facility in Qatar.
BP receives licence extension
BP (LSE:BP.) was granted an extension to a US licence allowing the use of a payment mechanism involving sanctioned Iranian and Russian entities tied to a major Azerbaijani gas development, according to Bloomberg.
Intertek likely to reject takeover approach
Intertek (LSE:ITRK) is reportedly preparing to reject an improved £58-per-share takeover proposal from Swedish private equity firm EQT, according to the Financial Times.
UK economic data points to slower activity
Separate economic surveys released on Thursday indicated that UK construction activity contracted at its fastest pace in nearly six years during the three months to March.
Meanwhile, a separate labour market survey showed that private sector pay settlements remained unchanged in March, with median annual pay offers holding steady from the previous month.
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