Category: Market Summary

UK equities moved lower on Friday, with the FTSE 100 retreating as geopolitical tensions intensified following Donald Trump’s decision to maintain a naval blockade on Iranian ports. Oil prices remained near multi-year highs, while diplomatic efforts between Washington and Tehran showed little sign of progress.

As of 07:24 GMT, the FTSE 100 was down 0.36% at 10,341.54. Major European markets, including those in Germany and France, were closed for the May Day public holiday.

Oil Tensions Persist as Strait of Hormuz Outlook Uncertain

Trump reaffirmed his commitment to the blockade, amid concerns that the Strait of Hormuz could remain closed for an extended period.

“Their economy is crashing, the blockade is incredible,” he told reporters at the White House. “Their economy is a disaster. So we’ll see how long they hold out.”

He also suggested energy prices could fall sharply once hostilities ease. “The gas will go down,” Trump said. “As soon as the war is over, it’ll drop like a rock.”

According to Axios, Trump received briefings from senior military officials, including Admiral Brad Cooper and General Dan Caine, on potential contingency strike plans aimed at breaking the diplomatic deadlock.

Escalating Rhetoric from Iran

Iranian leadership signalled a firm stance, with supreme leader Mojtaba Khamenei vowing to maintain nuclear and missile capabilities. President Masoud Pezeshkian described the blockade as “intolerable.”

Foreign ministry spokesman Esmaeil Baghaei cautioned that expectations for rapid diplomatic progress were “not very realistic,” while a senior Revolutionary Guards figure warned of “long and painful strikes” against U.S. positions if tensions escalate further.

Tariff Move on UK Whisky Adds Diplomatic Twist

In a separate development, Trump announced the removal of tariffs on UK whisky following a state visit by King Charles III.

“The King and Queen got me to do something nobody else was able to do,” he wrote on Truth Social.

UK Market Round-Up

NatWest Group (LSE:NWG) reported a 12% rise in first-quarter profit to £2 billion, beating expectations and upgrading its full-year income outlook toward the upper end of its £17.2–£17.6 billion range.

Bank of Ireland (LSE:BIRG) reaffirmed its full-year guidance after net loans increased at an annualised 5% to €83.6 billion, while its non-performing exposure ratio improved to 2%.

Pearson (LSE:PSON) posted a 4% rise in underlying first-quarter sales, supported by strong demand for virtual learning, and said it remains on track to meet full-year targets.

Data from BDO showed UK discretionary retail sales on a like-for-like basis fell 1.6% in April, marking the weakest performance in a decade outside the pandemic, as higher fuel costs and subdued consumer confidence weighed on spending.

Meanwhile, Nationwide Building Society reported that UK house prices rose 0.4% in April and were 3% higher year-on-year, although surveyors highlighted softer demand and the broadest monthly decline in prices since January 2024 during March.

European equities moved lower in early trading on Thursday, pressured by a sharp rise in oil prices to their highest intraday levels since the start of the Iran conflict, while investors prepared for key interest rate decisions from major central banks.

By 07:00 GMT, the Stoxx 600 was down 0.5%, Germany’s DAX had fallen 1.0%, France’s CAC 40 dropped 1.3%, and the UK’s FTSE 100 slipped 0.1%.

Oil spike fuels market concerns

Brent crude, the global benchmark, surged above $125 per barrel overnight after reports that Donald Trump is set to receive a briefing on potential new military strikes against Iran.

The move has been described as a possible way to break a deadlock in negotiations with Tehran over its nuclear programme, according to Axios.

Trump also wrote on social media: “Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon!”

Analysts at Deutsche Bank said the combination of escalating tensions and the continued closure of the Strait of Hormuz has “fed growing fears about an extended stagflationary shock” driven by rising energy costs. They noted that these concerns have already weighed on Asian markets and are now spilling over into Europe and U.S. futures.

Central banks in focus

With geopolitical risks intensifying and oil prices elevated, attention is turning to policy decisions from the European Central Bank and the Bank of England later in the day.

The ECB is widely expected to leave its deposit rate unchanged at 2%, though Deutsche Bank analysts suggested markets are increasingly pricing in a rate hike at the next meeting in June due to Europe’s sensitivity to higher energy costs.

“[S]o the question today is whether the ECB validates that view,” the Deutsche Bank analysts wrote.

For the Bank of England, policymakers are also expected to hold rates steady at 3.75%, while signaling concerns over slowing economic growth alongside rising inflation pressures.

Federal Reserve decision highlights divisions

The Federal Reserve also kept interest rates unchanged on Wednesday, as expected, though the decision marked one of the most divided outcomes in decades.

Fed Chair Jerome Powell said he intends to remain on the central bank’s board after his term as chair ends in May, a break from past practice that could complicate the transition to Kevin Warsh, who has been nominated by Trump to take over the role.

British stocks traded mixed on Thursday in volatile conditions, as investors assessed escalating geopolitical risks tied to Iran alongside a surge in oil prices, while awaiting key central bank decisions.

At 07:30 GMT, the FTSE 100 was up 0.13%, while Germany’s DAX fell 0.33% and France’s CAC 40 dropped 1.11%. Sterling edged higher against the dollar, with GBP/USD at 1.3488.

Geopolitical tensions and oil dominate sentiment

Investor confidence remained fragile after reports that United States Central Command is preparing to brief Donald Trump on potential military options involving Iran. The developments have heightened fears of renewed conflict and prolonged disruption to global energy markets.

Oil prices were a central driver of market moves, as concerns intensified over possible blockades affecting Iranian ports and broader instability across the region.

Central banks in focus

Attention now turns to policy decisions from the European Central Bank and the Bank of England later in the session. Both are widely expected to keep rates unchanged, though investors will be closely watching for signals on future policy direction as energy-driven inflation risks build.

This follows a divided outcome from the Federal Reserve, which held rates steady but saw three policymakers vote to remove its easing bias. Chair Jerome Powell said he will remain in his role for now, while Kevin Warsh moves closer to confirmation.

UK roundup

SIG (LSE:SHI) warned of lower first-half profit after a 5% decline in Q1 like-for-like sales, impacted by poor weather and continued weakness in European construction demand.

Glencore (LSE:GLEN) reported a 19% increase in first-quarter copper production to 199,600 tonnes, driven by stronger African grades, with its marketing division expected to outperform full-year guidance.

United Utilities (LSE:UU.) expects annual revenue growth and has submitted a £1.4 billion investment plan to Ofwat, targeting up to 4,000 supply chain jobs.

Whitbread (LSE:WTB) said it will overhaul its restaurant estate, replacing remaining branded sites and warning of up to 3,800 job cuts across the UK and Ireland.

Rolls-Royce (LSE:RR.) reaffirmed its full-year outlook, stating it expects to offset disruption linked to Middle East tensions.

Persimmon (LSE:PSN) highlighted rising supply chain costs tied to higher UK energy prices, with pressure expected to build into 2027.

Metro Bank (LSE:MTRO) maintained its 2026 outlook after reporting a 52% increase in Q1 lending to £5.5 billion, driven by strength in corporate and SME segments.

Unilever (LSE:ULVR) beat first-quarter sales expectations with 3.8% underlying growth, supported by strong demand for its core brands, while maintaining full-year guidance despite macroeconomic uncertainty.

European equities moved lower on Wednesday, continuing the downward trend from the prior session after a report from the The Wall Street Journal indicated that U.S. President Donald Trump was dissatisfied with Tehran’s latest proposal to end the conflict and had directed aides to prepare for a prolonged blockade of Iranian ports.

Concerns over tighter oil supply pushed Brent crude prices close to $115 per barrel, reigniting worries around inflation and interest rates.

The FTSE 100 Index fell 0.9%, while France’s CAC 40 Index declined 0.3%. Germany’s DAX Index hovered just below flat.

Straumann Holding rose nearly 2% after reporting 7.1% organic revenue growth in the first quarter of 2026, ahead of expectations.

UBS (NYSE:UBS) surged 4.7% after posting an 80% increase in first-quarter profit.

Sandoz (LSE:0SAN) declined 2.4% despite strong biosimilars growth in the same period.

Iberdrola (BIT:1IBE), Europe’s largest utility, dropped around 2% after reporting a 15% year-over-year decline in first-quarter net profit.

GSK (LSE:GSK) fell 1.8% despite delivering solid first-quarter results and reaffirming its 2026 outlook.

Similarly, AstraZeneca (LSE:AZN) slipped 1.3% even after posting better-than-expected quarterly earnings.

Lloyds Banking Group (LSE:LLOY) lost 1% after warning about the economic impact of the Iran conflict.

KPN (EU:KPN) dropped 2.7% after reporting a modest 2.1% increase in first-quarter sales.

Adidas (TG:ADS) jumped 6% following stronger-than-expected first-quarter operating profit and revenue.

Deutsche Bank (TG:DBK) fell 1.7% after reporting higher credit risk provisions and adverse currency effects.

European equities traded slightly weaker in early dealings on Wednesday, with investors balancing a heavy flow of corporate results against geopolitical risks in the Middle East and upcoming central bank policy decisions.

As of 07:34 GMT, the pan-European Stoxx 600 was down 0.1%. Germany’s DAX edged up 0.1%, while France’s CAC 40 slipped 0.2%. In London, the FTSE 100 declined 0.4%.

Markets remain cautious as oil prices climb amid the ongoing conflict involving Iran, raising concerns about the broader impact on inflation, corporate earnings, and the trajectory of interest rates.

Efforts to resolve tensions between the U.S. and Iran continue to stall, with little indication of progress. According to reports, Donald Trump has instructed aides to prepare for a prolonged blockade of Iranian ports, as policymakers face limited options to quickly de-escalate the situation.

At the same time, the Strait of Hormuz remains largely inaccessible to tanker traffic. Given that the route typically handles about one-fifth of global oil flows, crude prices have remained elevated, fuelling fears of a wider energy shock.

Earnings Parade

Against this uncertain backdrop, a number of major European companies released quarterly updates.

Adidas AG (BIT:1ADS) shares jumped more than 7% in early trading after the group delivered first-quarter operating profit ahead of expectations, despite what it described as a “very volatile and heavily discounted” retail environment.

UBS Group AG (NYSE:UBS) also moved higher, supported by an 80% surge in first-quarter profit driven by strong trading and client activity amid heightened market volatility.

STMicroelectronics (BIT:STMMI) advanced to its highest level since 2024 after reporting quarterly results that exceeded forecasts.

Airbus SE (EU:AIR) edged up after reaffirming its full-year delivery targets, even as it continues to manage engine supply issues from Pratt & Whitney.

Mercedes-Benz Group AG (TG:MBG) saw modest gains despite reporting lower revenue, largely due to increased competition from Chinese manufacturers.

Banco Santander (LSE:BNC) traded near unchanged levels after posting a 12.5% rise in underlying net profit for the first quarter.

GSK plc (LSE:GSK) fell more than 3%, even though it reaffirmed its 2026 outlook for revenue growth and expansion in core operating profit.

Aena S.M.E. (BIT:1AENA) also declined following the release of its quarterly results.

Looking ahead, attention is turning to the upcoming interest rate decision from the Federal Reserve later in the day. Policymakers are widely expected to leave rates unchanged, with market focus likely to shift toward guidance on the future path of borrowing costs.

The FTSE 100 moved lower on Wednesday as escalating geopolitical tensions overshadowed a series of positive corporate updates. Reports that Donald Trump is considering a prolonged economic blockade of Iran unsettled investors, signalling a shift toward sustained pressure rather than immediate military escalation.

By 07:58 GMT, the FTSE 100 had declined 0.6%, while the pound weakened against the dollar to 1.3505. European markets also edged lower, with the DAX down 0.2% and the CAC 40 falling 0.4%.

Market sentiment has been further impacted by stalled negotiations between the U.S. and Iran over Tehran’s nuclear programme, following a fragile ceasefire that has yet to evolve into a broader agreement. A key concern remains the continued disruption in the Strait of Hormuz, a critical passage for global energy supplies that typically handles around 20% of the world’s oil shipments. Iran has indicated it may maintain restrictions on the route in response to U.S. actions, heightening fears of prolonged supply constraints.

Additional uncertainty has emerged after the United Arab Emirates signalled its exit from OPEC, potentially weakening coordination among oil producers and raising the risk of unaligned production decisions once shipping normalises. Together, these developments have kept oil prices elevated and increased concerns around inflation, tighter financial conditions, and slower global economic growth.

UK Roundup

Lloyds Banking Group plc (LSE:LLOY) reported first-quarter pre-tax profit of £2 billion, exceeding expectations on the back of stronger lending income. The bank also flagged risks linked to the Iran situation, taking a £151 million charge while maintaining its 2026 profit outlook.

Aston Martin Lagonda Global Holdings plc (LSE:ASL) posted a narrower first-quarter operating loss of £56.9 million and secured £50 million in new funding from its core investor group. It reaffirmed full-year guidance but warned that instability in the Middle East could affect regional demand.

Haleon plc (LSE:HLN) reported organic revenue growth of 2.2%, slightly missing expectations due to weaker international performance. The company maintained its full-year guidance, anticipating stronger contributions from North America.

Jet2 plc (LSE:JET2) said summer bookings are up 7.7% year on year, reflecting resilient demand for travel. However, it noted that geopolitical uncertainty linked to Iran could affect peak-season occupancy, although fuel costs remain largely hedged.

AstraZeneca plc (LSE:AZN) exceeded expectations in the first quarter, reporting earnings per share of $2.58 and an 8% increase in revenue to $15.29 billion, driven by strong demand for cancer treatments. The company maintained its full-year outlook.

GSK plc (LSE:GSK) also delivered better-than-expected first-quarter results, supported by strong sales in respiratory and general medicines, outperforming analyst forecasts on both revenue and profit.