- FTSE 100 falls 153 points to 10,413
- Iran nuclear offer reported, played down as 'old news'
- Airline shares hit by Wizz Air profit warning
4.57pm: A day of losses
As the war in Iran entered its sixth day, uncertainty weighed on global markets with the FTSE 100 shedding 153 points to close at 10,413.
“While images of war continue to roll across screens around the globe, and Iranian missiles and drones attack other countries, markets have little upon which to base a sustained rally,” IG chief market analyst Chris Beauchamp said.
“The president’s promise to escort ships has failed to support a bounce, given the difficulties which the US Navy faced in trying to defeat the less well-armed Houthis, and while some headlines suggest Iran has asked for negotiations, both sides continue to hurl ordnance at one another. Until this calms down, investors will continue to take the risk-off approach.”
4.01pm: FTSE on course for big loss
The FTSE 100 is on course for another 100-point loss for the day, with similar drops for other European equity benchmarks.
London's blue-chip miners have led the decline, perhaps connected to China downgrading its GDP growth target to 4.5-5% for this year, down from the previous "around 5%" goal.
Elsewhere, Reckitt Benckiser led the fallers, dropping more than 7% after its final results.
Mining stocks were broadly weaker, with Endeavour Mining, Rio Tinto, Anglo American and Metlen Energy & Metals all declining.
Defence and industrial names also slipped, including BAE Systems, Babcock and Rolls-Royce, alongside traditional 'defensive' consumer stocks such as Imperial Brands, British American Tobacco and Tesco.
3.50pm: Effects of higher energy prices on UK
More on the impact from rising energy prices.
Oxford Economics says the eurozone and the UK are relatively vulnerable to potential second-round effects from the energy price surge triggered by the Iran conflict.
“The US, Japan, Canada, and smaller non-euro European economies (Sweden, Switzerland, Norway) are less exposed,” says Michael Saunders.
He forecasts that based on current energy price assumptions, inflation by the end of this year for the UK and eurozone will be roughly 0.5-0.6 percentage points higher than previously expected – "a greater impact than elsewhere".
As we are in the sixth day of fighting, the length and magnitude of the energy spike is highly uncertain, he adds.
"Our updated assumptions assume the energy price shock is relatively short-lived, but the effects on inflation and risks of second-round impacts will be greater if the conflict is more drawn out."
No Bank of England interest rate cuts are likely while these pressures are in effect, he says.
"We still think the Federal Reserve is likely to ease gradually this year because at this stage the inflation effects of the energy price surge are likely to be relatively modest. That may change."
3.35pm: Oil prices on the move, Shell and BP lifted
Oil prices are pushing to new highs this afternoon, lifting Shell and BP but London's blue-chip index is continuing to head lower.
Front-month Brent crude is up 3.8% to $84.49 a barrel, around the highs seen at the start of the week and last seen before that in July 2024.
US crude oil is also breaching highs seen earlier this week at almost $78.80, also 20-month highs.
Shell is up 1.1% and BP almost 2%.
UK natural gas prices have not, though, having spiked at the start of the week but eased back a little.
As for inflation in the UK, households will be protected from rising energy prices until at least July under the Ofgem price cap, which is bringing energy bills down from April.
Research group Cornwall Insight warned this week that that bills could leap by £160 a year from July.
2.50am: Wall Street opens lower, FTSE slides
US stocks have opened in the red, but the tech-powered Nasdaq is close to breaking even already, down less than 0.1%.
The Dow Jones is down 0.9% and the S&P 500 opened 0.3% lower.
Back in London, the FTSE has slumped to its lowest point of the session.
1.54pm: Wall Street set to open softer
US futures are more firmly pointing to a softer open now. ,
Dow Jones futures are down 0.6%, with the Nasdaq slipping 0.45% and the S&P 500 0.35%.
Broadcom shares are still up strongly in pre-market trading.
1pm: Energy prices and other inflationary things
As a reminder, as the world prepares to absorb the inflationary impact of US strikes on Iran, Treasury Secretary Scott Bessent also confirmed that a 15% global tariff should take effect this week.
Oil prices are back up at around the top end of their recent channel.
Front-month WTI topped multi-month high from earlier in the week.
"Oil prices remain elevated, and as things stand there’s no sign that either WTI or Brent looks set to reverse direction and fill the price gap that opened up between Friday’s close and Monday’s open," says market analyst David Morrison at Trade Nation.
"This is despite President Trump’s assurance that the US will ensure affordable insurance rates for tankers passing through the Strait of Hormuz, along with providing naval protection.
"There was a modest dip after a US military official declared this morning that Iran had failed to close off the Strait.
"Yet sentiment wasn’t helped after Iran launched a missile attack on Israel this morning, and after a US submarine torpedoed an Iranian frigate yesterday off the coast of Sri Lanka.
"Iran promised to retaliate, and there are unsubstantiated reports today that Iran has struck a US oil tanker. Oil has, perhaps more than any other market, been driven by headlines concerning the ongoing hostilities across the Middle East, particularly around the Strait of Hormuz."
Iranian armed forces have denied launching a drone attack on Azerbaijan, following reports that two drones flying from the country's direction fell near an airport close to the Nakhchivan region.
12.16pm: European markets flatten off
The FTSE 100 and wider European markets are holding onto modest gains as we move into afternoon trading.
Spain's IBEX 35 continuing to outperform with a rise of 0.8% while the FTSE 100, DAX and CAC 40 all traded just above flat, up between 0.1% and 0.2%.
For FTSE 350 stocks, Rentokil Initial is top of the leaderboard, up 13% now, followed by Coats Group, Hunting, Entain and Admiral.
At the other end, fallers are led by PageGroup, down 23% after the specialist professional recruiter reported a sharp decline in annual profits amid prolonged weakness in its European and UK markets.
Wizz Air is down 8.3% after its warning last night,
Blue-chip Reckitt Benckiser is down 6% as the maker of Dettol and Durex said it looks forward "with confidence" after a year in which its core business grew faster than its own medium-term targets, and promised to sustain that momentum into 2026.
Analysts at Jefferies said earlier the results looked "generally good enough we think in light of the uncertainties given the cold & flu season flag by peers last week", but something seems to be worrying investors.
11.43am: Volatility likely to continue, says Citi
We are in the sixth day of conflict in the Middle East today.
After equity markets bounced yesterday, Citi has been assessing "how much preexisting market froth" had already been unwound amid selling at the start of the week.
"Three observations stand out," says Beata Manthey, the bank's European equity strategy head,.
First, she says the current conflict "began at a point of exceptionally strong market sentiment and stretched valuations. Indeed, we find that PE multiples were effectively as high as ever heading into a meaningful geopolitical shock."
Second, Manthey notes that the sharpest moves this week have been in indices that had previously delivered the strongest YTD returns. Korea's Kospi stands out here.
Finally, she notes that Citi latest equity positioning model update "shows still-elevated levels of both net and gross investor positioning outside of the Nasdaq.
Altogether it suggests, the Citi strategist says, "that equities could remain volatile and sensitive to incremental news flow until a plausible/concrete conflict resolution is in place".
10.54am: Econ data analysis
Following the construction PMI a short while ago, Matt Swannell, chief economic advisor to the EY ITEM Club, says the sector "clearly faces several challenges".
"Conflict in the Middle East is likely to further disrupt the PMIs as corporate sentiment deteriorates against a backdrop of heightened geopolitical uncertainty.
"The construction sector faces an uncertain outlook over the next twelve months. Planning reforms and new public infrastructure projects might offer some bright spots, but ongoing economic uncertainty and the possibility of disruption to energy markets will, if sustained, weigh on the sector’s prospects."
Also this morning, the Bank of England’s Decision Maker Panel showed there had been a slight easing in inflationary forces before the conflict in the Middle East broke out.
The DMP survey showed firms planned to raise their prices by 3.3% over the year from February, down from 3.4% in January, with the three-month average of firms’ own price expectations down to 3.4% in February from 3.5% in January.
Companies' one-year ahead CPI inflation expectations rose to 3.0% in February, from 2.9% in January, above the consensus, 2.8%.
Hiring plans improved for the second month running, while wage growth stayed stubbornly strong, with firms expecting wage and price growth to remain above target consistent rates until the end of 2026 at least.
"All told, the DMP provides little support for multiple MPC rate cuts this year, in our view. We expect the next Bank Rate cut in April but feel comfortable with our forecast of only one rate cut this year," says economist Rob Wood at Pantheon Macroeconomics.
10.32am: Iran plays down offer
There are reports that Iran’s has clarified that reports of an offer to abandon its nuclear programme referred to earlier diplomatic discussions and not to the current situation.
This followed reports in Sky News Arabia and Bloomberg suggesting that an Iran official had offered to abandon its nuclear programme if the US proposed a satisfactory alternative arrangement.
According to the IRNA news agency, the remarks attributed to Iran’s deputy foreign minister were taken out of context and should not be interpreted as a new proposal.
European stock indices remain elevated. Government bond yields, which dropped after the Iran report emerged, have now mostly moved back to where they were.
10.01am: UK car sales rise
UK new car registrations rose 7.2% in February to 90,100 units, the highest February volume in 22 years, fresh data from the industry shows.
It was driven by a 17.6% jump in private retail sales ahead of the March numberplate change, with fleet registrations up 1.8%.
Battery electric vehicles accounted for 24.2% of the market, up 2.8% in volume terms, but February marked the second consecutive month of declining BEV market share year-on-year, raising questions about whether the industry can hit the mandated 33% share required for 2026. Year-to-date BEV share stands at 22%.
Tesla was a notable weak spot, with UK registrations falling 37% to 2,422 vehicles, though the company has said monthly figures are a poor guide to underlying demand given its delivery model, and pointed to quarterly data as a more reliable measure.
9.40am: Cautious optimism widens
European markets have also turned higher following the reported Iran offer.
As well as the 0.3% gain for the London index, Spain's IBEX 35 is leading the way with a gain of 1.1%, while German and French benchmarks are both rising around 0.3-0.4%.
Only four of the FTSE top 20 biggest companies are in the red: Rio Tinto (down 3.4%), Unilever (down 0.1%), BAT (down 0.7%) and BAE Systems (down 0.35%).
Meanwhile, the UK construction sector PMI has been released, showing a fall to 44.5 in February from 46.4 in January, below the consensus forecast of 47.
9.25am: Sceptical optimism?
US futures also spiked into the green on the reported Iran nuclear offer, or is it a gambit?
However, movesd are only small so far, suggesting some scepticism.
It comes at the same time as other news reports reveal Iranian strikes in a wider array of countries on Thursday, with a drone attack on an airport in Azerbaijan and Kurdish military bases in Iran, bringing the number of countries directly affected by the conflict to a dozen.
Earlier, an Iranian missile hit a US oil tanker in the Persian Gulf, a local Tasnim news agency said.
Iran have now targeted 12 different countries since Saturday. - i24 https://t.co/unH3dTjkQx
— Open Source Intel (@Osint613) March 5, 2026
9.07am: FTSE jumps on reported Iran offer
The FTSE 100 has jumped into positive territory, coinciding with reports of a significant diplomatic signal from Iran.
Iran's deputy foreign minister was reported by Bloomberg and other sources as saying the country is ready to abandon its nuclear program on the condition that the United States makes a "lucrative" alternative offer.
The FTSE is now up 60 points at 10,627.5, with all but six of the index's largest names are in green.
Iran's Deputy ForMin: Iran Is Ready To Abandon Its Nuclear Program On The Condition That The United States Makes A Lucrative Alternative Offer https://t.co/lC7NAyXksj
— LiveSquawk (@LiveSquawk) March 5, 2026
NOW ????
CAPITULATION BEGINS?
IRANIAN DEPUTY FOREIGN MINISTER: “IRAN IS READY TO ABANDON ITS NUCLEAR PROGRAM ON CONDITION THAT THE UNITED STATES PRESENTS A SATISFACTORY ALTERNATIVE OFFER.”
— Open Source Intel (@Osint613) March 5, 2026
8.39am: European markets down
European markets have generally drifted lower in early trading, with the FTSE 100 the relative outperformer, down 0.2% to 10,544.
Italy's FTSE MIB has fallen 0.8%, Germany's DAX and France's CAC 40 both have dropped 0.6% and the IBEX 35 in Madrid lost 0.5%.
Market analyst Neil Wilson at Saxo notes that the big jump in the Korean Kospi earlier was as the country activated its Covid-era market stabilisation fund following a steep selloff over the last two days, and one policymaker in Seoul warned the conflict could disrupt production of semiconductors.
"Crude trades higher this morning which could be a weight on the rebound we saw yesterday, while Dutch TTF gas +7% after yesterday’s drop.
"As per yesterday, this is hardly the time to be confident about a recovery. Now is the time to keep powder dry."
Wilson calls yesterday's bounce "odd" as the narrative shifted and some of the flurry of de-risking of popular trades faded.
"Dutch TTF gas fell 10%; a clear sign of easing worries. I’m not convinced that this is the end of the volatility however, with the risk of escalation and ongoing pressure on global trade and energy flows still elevated and likely to become more of a focal point the longer this drags."
8.15am: FTSE starts lower as miners and airlines fall
The FTSE 100 has started in the red, down 30 points at 10,537 as miners and airlines drop.
Rio Tinto, easyJet and British Airways owner IAG are leading the fallers, all down over 3.3%.
Declines for Endeavour Mining, Anglo American, Fresnillo and IHG round out the mining and travel themes.
Airlines were hit by a profit warning from Wizz Air, released after 5pm yesterday.
At the other end, Rentokil Initial has jumped 8.9% on the back of its results.
7.56am: ITV looking forward to World Cup
ITV says it remains in discussions with Sky regarding a possible sale of its media and entertainment business as it posted a smaller decline in profits for 2025 than expected.
Group external revenue edged up 1% to £3.5 billion, as 10% growth in ITV Studios' external revenues offset a 5% fall in total advertising revenue, while adjusted earnings per share declined 11%.
Chief executive Carolyn McCall said the results demonstrated "the scale of our transformation," pointing to two-thirds of revenues now coming from ITV Studios and its digital media and entertainment business.
Looking to the current year, total ad revenue in Q1 is forecast to be down around 2%, which is better than had been expected, with advertisers holding back budgets in order to spend in Q2 and Q3 around the World Cup.
7.44am: Aviva ups returns
Aviva has announced a 10% increase in its final dividend alongside a £350 million share buyback as it posted results for what chief executive Amanda Blanc boasts was an "outstanding performance" for 2025.
Group operating profit jumped 25% to £2.2 billion as the life insurer delivered financial targets 12 months ahead of schedule.
Blanc noted that it marked Aviva's fifth consecutive year of strong, profitable growth, with broad-based momentum across its divisions.
Looking ahead, the FTSE 100 group has set new three-year targets that include operating earnings per share growth of 11% annually through to 2028 and cumulative cash remittances of more than £7 billion targeted between 2026 and 2028.
7.25am: Broadcom earnings and LSEG collab
Some news from our US and Aussie colleagues overnight.
Broadcom, the ninth largest company on the S&P 500, reported first-quarter results that beat Wall Street forecasts, driven by continued strength in artificial intelligence semiconductor solutions.
Revenue grew 29% to $19.3 billion, beating estimates of $19.18 billion, while adjusted EBITDA rose 30% to $13.1 billion.
CEO Hock Tan said sales were driven by "robust demand for custom AI accelerators and AI networking. Our AI revenue growth is accelerating, and we expect AI semiconductor revenue to be $10.7 billion in Q2."
Elsewhere, LSEG and ASX Ltd announced a collaboration to modernise and upgrade ASX 24’s trading platform, in a move aimed at supporting the next phase of growth and resilience.
ASX 24 is the leading trading venue for Australian and New Zealand interest rate, equity and commodity futures and options.
7.16am: FTSE 100 tipped to continue rebound
The FTSE 100 has been tipped to start slightly higher on Thursday, building on the recovery from the previous day, despite fighting still taking place in the Middle East.
London's blue-chip index has been called 16 points higher, which would add to the 83.5 points accumulated yesterday to close at 10,567.65.
US stocks closed solidly higher overnight, led by a 1.3% gain for the Nasdaq, while the S&P 500 added 0.8% and the Dow Jones rose 0.5%.
Asian stocks are rallying to different degrees this morning, with Japan's Nikkei up 1.8% and India's Sensex 0.9%, while Korea's Kospi rebounds 9.6% higher.
"Donald Trump says that the US is doing very well in Iran, and investors are willing to believe him, hoping the conflict could move toward a resolution," says market analyst Ipek Ozkardeskaya at Swissquote. "But the news tell another story."
She notes that reports from the New York Times that Iran was ready to negotiate were later dashed by Iranian authorities.
"Chinese financial institutions are scaling back their exposure to Middle Eastern debt – including Aramco – and despite US escort and insurance plans, traffic through the Strait of Hormuz reportedly came to a complete halt yesterday, with no ships transiting."
European, US and Asian stocks seem to be rebounding on hopes that the Iran conflict could come to an end, she says.
"Frankly, I’m not sure why investors think so. There is no clear plan, missiles and bombs continue to fall, and oil and gas prices are trading higher this morning."