European markets moved lower on Tuesday as hopes for progress in U.S.-Iran negotiations faded, with investors growing increasingly cautious over the possibility of renewed military escalation in the Middle East.
Britain’s benchmark FTSE 100 index fell 1.13% in early trading, while Germany’s DAX declined 1.2% and France’s CAC 40 dropped 1%. Sterling also weakened, with GBP/USD falling 0.52% to 1.3540.
Market sentiment deteriorated after U.S. President Donald Trump indicated that discussions with Iran had reached an impasse. Speaking from the Oval Office on Monday, Trump described Iran’s latest negotiating proposal as “unbelievably weak” and said the ceasefire was effectively “on life support.”
The U.S. president also told Fox News he was considering reviving “Project Freedom,” a military initiative aimed at escorting shipping through the Strait of Hormuz after disruptions linked to Iran. Trump suggested any renewed operation could form part of a wider military strategy.
According to reports, Trump later held a high-level national security meeting at the White House Situation Room to discuss possible next steps regarding Iran. Israeli media, citing senior U.S. officials, reported that additional military strikes against Tehran were under consideration to increase diplomatic pressure.
Iranian parliamentary speaker Mohammad Bagher Ghalibaf responded defiantly, stating that Tehran was “prepared for all options” and insisting the United States would eventually need to recognise the rights outlined in Iran’s 14-point proposal.
UK Market Round-Up
On the Beach Group plc
On the Beach (LSE:OTB) reinstated full-year adjusted pretax profit guidance of between £18 million and £25 million, although the range remained below analyst expectations. The company said conflict in the Middle East had negatively affected bookings to destinations including Turkey, Cyprus and Egypt.
Marston’s PLC
Marston’s (LSE:MARS) reported a 7.9% increase in underlying half-year pretax profit, supported by cost discipline and operational efficiency measures, while maintaining its full-year outlook.
Picton Property Income
Picton Property (LSE:PCTN) said LondonMetric Property and Schroder Real Estate Investment Trust had agreed terms on a non-binding £403 million all-share takeover proposal.
Wizz Air Holdings
Wizz Air (LSE:WIZZ) forecast break-even to slightly positive earnings for fiscal 2026, while cautioning that geopolitical instability in the Middle East continues to create a difficult operating backdrop.
Greggs plc
Greggs (LSE:GRG) reported like-for-like sales growth of 3.3% over its latest 10-week trading period, helped by new menu launches, while leaving full-year expectations unchanged.
Imperial Brands
Imperial Brands (LSE:IMB) warned that prolonged conflict involving Iran could impact both input costs and consumer demand, although the company maintained its annual guidance. First-half adjusted operating profit of £1.64 billion came in slightly below market expectations.
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