LONDON MARKET MIDDAY: Stocks move lower as war worry comes to fore | Financial News
European equities slipped on Thursday midday as geopolitical uncertainty resurfaced and fresh survey data pointed to mounting pressure on the eurozone and UK economies. Attention remained fixed on US-Iran negotiations, with reports indicating Tehran will not allow enriched uranium to be sent abroad, a key sticking point in efforts to reach a deal.
In London, the Cboe UK 100 fell 0.6% to 1,031.55, while the Cboe UK 250 inched up 0.1% to 19,772.27 and the Cboe Small Companies rose 0.6% to 18,646.02. On the continent, the CAC 40 in Paris lost 0.6% and Frankfurt’s DAX 40 dipped 0.2%.
Oil prices firmed as tensions lingered: Brent crude advanced to USD107.28 a barrel from USD105.26 at Wednesday’s London close. Gold eased to USD4,515.78 an ounce from USD4,536.32.
“Hopes for a breakthrough remain, but neither side looks in a hurry,” said Susannah Streeter at Wealth Club, noting that crude has edged higher after a pullback. She added that even a swift reopening of the Strait of Hormuz would not resolve months of supply snarl-ups. With significant infrastructure damage and warnings that full recovery in oil flows may not arrive until late next year, energy-intensive sectors—particularly airlines—continue to face elevated costs and disrupted operations.
easyJet shares slipped 0.5% after warning on higher fuel bills and reduced visibility. The carrier’s pretax loss widened to GBP552 million in the six months to March, from GBP401 million a year earlier, while revenue rose 12% to GBP3.95 billion from GBP3.53 billion. The airline said there remains uncertainty over its financial outcome for fiscal 2026 given lower-than-normal forward bookings. It is 72% hedged at USD726 per metric tonne; a USD100 per tonne change in fuel price equates to about GBP35 million in costs.
In currencies, sterling softened to USD1.3420 from USD1.3456 late Wednesday and eased to EUR1.1561 from EUR1.1568.
UK private-sector activity slipped back into contraction in May. The S&P Global flash composite PMI fell to 48.5 from 52.6 in April, a 13-month low and below the 50.0 threshold. Chris Williamson at S&P Global Market Intelligence said the economy faces a “perfect storm” as political uncertainty compounds the impact of the Middle East conflict, with companies reporting falling output, rising inflation, supply shortages, and job cuts.
Across the eurozone, the flash composite PMI dropped to 47.5 in May from 48.8 in April, a 31-month low, highlighting ongoing pressure on services and cooling momentum in manufacturing. The European Commission trimmed its 2026 growth forecast for the single currency area to 0.9% from 1.2%, and projected higher inflation than previously expected. The euro slipped to USD1.1604 from USD1.1632, while the dollar strengthened to JPY159.13 from JPY158.69.
US rates moved higher, with the 10-year Treasury yield at 4.62% from 4.58% at Wednesday’s London close and the 30-year at 5.15% from 5.11%. Analysts at ING said hawkish tones in April’s FOMC minutes—where “many” members signaled the next move could be a hike—make it harder to bet on a weaker dollar. Around 17 basis points of tightening remain priced by December, and while that could unwind if a US-Iran deal materializes, a swift return to pricing cuts looks unlikely.
US stocks were set to open softer: futures pointed to the Dow Jones Industrial Average down 0.1%, the S&P 500 lower by 0.3%, and the Nasdaq Composite off 0.4%.
In London movers, Scottish Mortgage Investment Trust gained 1.1% after SpaceX filed for an initial public offering of part of its business. The filing revealed 2025 revenue of USD18.7 billion and an operating loss of USD2.6 billion as the company invested heavily in next-generation rockets and artificial intelligence.
ICG led the FTSE 100, up 3.3%. The private equity asset manager reported total assets under management of USD126 billion as of March 31, up 13% year-on-year from USD112.5 billion, and fee-earning AUM of USD86.5 billion, up 15% from USD75.1 billion. Shares are down roughly 7% year-to-date amid concerns around private credit, but have rebounded about 30% from a March trough. For the year to March 31, pretax profit swung to GBP155 million from a GBP106 million loss, while revenue was little changed at GBP1.92 billion versus GBP1.93 billion.
Qinetiq lifted its dividend by 24% to 11.00 pence per share and expanded its share buyback by GBP200 million, scheduled to commence in March 2027 upon completion of its current programme.
Nexteq tumbled 19% after cautioning that trading remains difficult. Its Quixant division, serving the land-based gaming market, has been indirectly affected by US tariffs, leading to softer demand and order cover. The firm now expects 2026 revenue to be about 15% below prior market expectations, which it put at USD85.0 million, though it views the headwinds as temporary amid an uncertain macro backdrop.
Still ahead Thursday are US weekly jobless claims at 13:30 BST and the US flash PMI at 14:45 BST, which will offer fresh clues on the trajectory of the world’s largest economy.
