Early market roundup: Stocks lower as oil prices jump on US-Iran war

Stock prices in London were lower on Thursday morning as oil prices were sharply higher while the US and Iran continued to trade strikes; meanwhile a plethora of London-listed firms published trading updates and results.

Brent oil was quoted at USD97.73 a barrel early in London on Thursday from USD93.74 late Wednesday.

This follows the 12th consecutive night of US strikes on Iran, and Tehran-backed Houthi rebels claiming to have conducted missile and drone strikes on two Saudi tankers in the Red Sea, after threatening to blockade Saudi ports.

It remains unclear how fully the Houthis could enforce a blockade, but the threat could compound the shock of the Hormuz closure, endangering Riyadh's ability to bypass the strait for some oil exports.

The FTSE 100 index opened down 29.68 points, 0.3%, at 10,687.29.

3i Group rose 4.2%.

The London-based private equity firm investing in companies in Europe and North America said non-food discounter Action delivered operating earnings before interest, tax, depreciation and amortisation of EUR609 million in the first quarter of its financial year, up 18% from EUR516 million.

Centrica fell 3.1%.

The British Gas owner announced that around 1,300 proposed job reductions were underway as adjusted operating profit fell 9.5% to £497 million in the first half of 2026, from £549 million a year prior.

The job cuts are a response to structural changes in customer behaviour, with customer contact falling sharply as around 90% opt to use digital methods of support, according to Centrica.

BT declined 1.7%, after reporting first-quarter pretax profit of £505 million, down 4.0% from £526 million a year prior.

The FTSE 250 was down 81.08 points, 0.3%, at 23,845.55.

Mitchells & Butlers lost 5.1%.

The pub chain behind Toby Carvery reported flat third-quarter like-for-like sales, with food sales down 2.4%, citing the recent extreme heatwave.

But drink sales rose 2.6%, benefitting from the men's football World Cup.

easyJet rose 5.2%, despite reporting that headline pretax profit fell 70% to £85 million in the third quarter, from £286 million a year prior, amid higher fuel costs.

Chief Executive Officer Kenton Jarvis says: "We have continued to manage the impact of the Middle East conflict, and its effect on fuel prices and booking trends, during the quarter. Pricing has been attractive, driving strong late booking demand for our flights and holidays and our relentless focus on execution has delivered an excellent operational performance."

Further, he noted that easyJet is now entering into "the busy summer period".

The AIM all-share was down 1.95 points, 0.3%, at 773.13.

The Cboe UK 100 was down 0.4% at 1,062.45, the Cboe UK 250 was down 0.1% at 20,783.24, and the Cboe small companies was marginally higher at 18,532.36.

In European equities on Thursday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was down 0.9%.

The European Central Bank is expected to leave interest rates unchanged as it announces its decision at 1315 BST, followed by a press conference with President Christine Lagarde.

The ECB's deposit facility rate currently stands at 2.25%, while the main refinancing operations rate is 2.40% and the marginal lending facility rate is 2.65%.

Back on the LSE, oil stocks benefited from the conflict escalation, with BP up 2.0%, Shell up 1.1%, Harbour up 3.3% and Ithaca up 2.1%.

Anglo American rose 5.1%, after maintaining production and most unit cost guidance for 2026, although it expects Chile and Peru copper costs to decrease.

Second-quarter copper production was flat but output from Collahuasi and Quellaveco increased, while Kumba and Minas-Rio delivered stable performances despite premium iron ore production decreasing 3%.

In defence stocks, BAE rose 0.7% and Babcock 0.3%, but Rolls-Royce lost 0.5%.

Former UK armed forces minister Al Carns has turned down a role in new Prime Minister Andy Burnham's cabinet, saying that the issue of defence funding has "not yet been settled".

However, he welcomed the appointment of former defence minister John Healey as chancellor, saying: "John resigned for the same reasons I did. He is a man of his word and he has made it clear that he will deliver on the commitments that led him to leave government in the first place."

On AIM, LPA Group jumped 16%, after announcing a new agreement with Boeing Distribution.

LPA expects an initial stocking order of approximately £500,000 in the second half of this year.

The pound was quoted flat at USD1.3376 early Thursday, compared to USD1.3377 on Wednesday. Against the euro, sterling fell to EUR1.1703 from EUR1.1717 a day prior.

The euro stood at USD1.1426, higher against USD1.1410. Against the yen, the dollar was trading at JPY163.17 compared to JPY163.12.

In Asia on Thursday, the Nikkei 225 index in Tokyo was up 0.3%. In China, the Shanghai Composite was up 0.3%, while the Hang Seng index in Hong Kong was up 1.0%. The S&P/ASX 200 in Sydney was up 0.2%.

In the US on Wednesday, Wall Street ended mixed, with the Dow Jones Industrial Average down 6.06 points, the S&P 500 down 0.1% and the Nasdaq Composite up 0.6%.

The yield on the US 10-year Treasury was quoted at 4.67%, widening from 4.65%. The yield on the US 30-year Treasury was quoted at 5.16%, widening from 5.14%.

Gold was quoted lower at USD4,094.64 an ounce against USD4,157.48.

Still to come on Wednesday's economic calendar, the ECB rate call will follow the UK CBI business optimism index.

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