British equities started Thursday on a weaker footing as ongoing geopolitical strain in the Middle East continued to dampen investor sentiment, with little indication of progress toward renewed U.S.-Iran negotiations.
By 07:11 GMT, the FTSE 100 was down 0.6%. Germany’s DAX fell 0.4%, while France’s CAC 40 edged up 0.4%. Sterling also softened, with GBP/USD slipping 0.1% to 1.3495.
Tensions remained high after Iran seized several vessels in the Strait of Hormuz earlier in the week. Meanwhile, the United States maintained its naval blockade of Iranian ports and continued targeting Iran-linked shipping in regional waters.
Traffic through the strait—accounting for around 20% of global oil supply—remained heavily restricted.
Although U.S. President Donald Trump announced an indefinite extension of the ceasefire, prospects for a diplomatic breakthrough appeared slim.
Washington has insisted on the full reopening of the Strait of Hormuz as a condition for any agreement, while Iran has refused to enter talks under ongoing blockade conditions, leaving negotiations at a standstill.
Iranian President Masoud Pezeshkian said Tehran remains willing to engage, but emphasized that “breach of commitments, blockade and threats” are the key barriers to meaningful dialogue, underscoring the country’s position that current conditions rule out genuine negotiations.
Iranian officials also placed responsibility on Washington for the stalemate, warning that reopening the strait would be “impossible” as long as military and economic pressure continues.
The standoff has increased uncertainty around how long the ceasefire can hold, even though it has so far extended beyond its initial timeframe.
Oil prices moved higher amid the disruption. Brent crude climbed 1.5% to $103.42 per barrel, while West Texas Intermediate gained nearly 1.6% to $94.48, supported by constrained supply and reduced shipping activity.
UK round up
London Stock Exchange Group (LSE:LSEG) said it expects full-year revenue growth toward the top end of its 6.5%–7.5% guidance after first-quarter income rose 9.8%, surpassing analyst forecasts on strong performance in its data and analytics division.
CEO David Schwimmer pointed to solid momentum and continued AI deployment, even as the company faces pressure from activist investor Elliott Management to enhance valuation and performance.
Sainsbury’s (LSE:SBRY) cautioned that the Iran conflict could impact consumer demand and profitability, projecting 2026/27 underlying operating profit in the range of £975 million to £1.08 billion amid elevated uncertainty.
The retailer, echoing Tesco, said its greater exposure to non-food sales makes it more sensitive to any pullback in discretionary spending, despite a strong start to the year.
WH Smith (LSE:SMWH) lowered its full-year profit outlook to £90 million–£105 million and suspended its dividend, citing weaker passenger volumes and softer consumer confidence linked to Middle East travel disruption.
The company warned that airport sales are likely to come under pressure as higher jet fuel costs drive up airfares, while it adopts a cautious stance to conserve cash and reinforce its balance sheet.
Asos (LSE:ASC) said it is pursuing refunds on £7 million in U.S. tariffs as part of efforts to protect margins during its turnaround, after the levies were deemed unlawful by the Supreme Court.
The retailer, already dealing with competitive pressures and subdued demand, warned that broader geopolitical risks—including the Iran conflict—could further impact costs and consumer spending.
