Daily market update: Markets slip, Strait of Hormuz blockade, Vistry, Heathrow, Lidl

The failure of initial talks between the US and Iran cannot be counted as a huge eye-opener, but Donald Trump’s threat to launch a US blockade of the Strait of Hormuz might not have been on the market’s bingo card.

Investors are trying to gauge whether a fragile ceasefire will hold, and they are waiting to see the next moves from Tehran and Washington. Against this backdrop, oil above $100 per barrel is no surprise and the longer it persists at this level, the greater the scars for the global economy.

The stagflation word is being widely aired once again as geopolitical turmoil threatens to stymie international growth and stoke inflationary pressures.

Asian and European markets turned lower, while the FTSE 100 was spared a larger drop thanks to heavyweight constituents BP and Shell making renewed progress on the latest move higher for energy prices.

In what is becoming a familiar pattern, the losers in London included financial stocks, housebuilders and names with links to the aviation sector.

Vistry

The market seems underwhelmed by the identity of Greg Fitzgerald’s replacement at Vistry after the housebuilder chose to promote from within.

Fitzgerald, who came out of retirement to lead what was then Bovis Homes before a subsequent merger with Galliford Try’s housebuilding division, was experienced in the industry.

His successor Adam Daniels knows the business well from his current role as head of one of its main regional divisions.

However, Vistry has endured a difficult period in recent years after an accounting scandal identified in 2024 shook the foundations of the company’s credibility and led to major profit downgrades.

It seems investors would have preferred to see a more experienced pair of hands at the helm to continue the recovery from this episode in what looks set to be a tricky market environment.

Heathrow

There is a real risk that Heathrow’s busiest March in history is as good as it gets for the airport for the foreseeable future. 

Closures across parts of Middle East airspace led to Heathrow picking up extra business from transfer passengers caught up in the disruption. Unfortunately, the outlook is clouded by various airlines in Europe and Asia warning of last-minute cancellations if they cannot access sufficient fuel. 

With the Middle East crisis still ongoing despite a temporary ceasefire, there remains considerable uncertainty over the supply of oil and that is bad news for Heathrow. The longer the uncertainty lingers, the greater the chance that holidaymakers choose to stay at home and that could lead to a summer slump for the aviation industry. 

Lots of people won’t want the hassle of wondering if their flight is going to be cancelled or not. Equally, a lack of jet fuel would mean that many aircraft are grounded, so willing travellers wouldn’t be able to take off anyway. 

Heathrow could be braced for the most damaging period since the Covid-19 pandemic unless there is a resolution to the Middle East crisis. 

Lidl 

Reports suggest Lidl is planning to offer cheap mobile phone plans in the UK and other parts of Europe. 

It would see Lidl follow in Tesco’s footsteps by offering grocery customers extra services beyond food and drink. 

While Tesco has retrenched from most non-grocery operations in recent years, it still operates a mobile business in partnership with Virgin Media O2. 

Such a move would be an easy win for Lidl as it is a trusted brand and has a large customer base, and selling phone packages would take up barely any space in its stores. It’s a lot easier sell than a financial product. It’s another way to earn money from its customer base and Tesco has already done the hard work in creating association between grocery and mobile. 

The obvious negative is the fact the UK mobile market is already well-served. Lidl would have to push hard on price to quickly grab market share from rivals – but that’s something it’s well-versed in.