- FTSE 100 up 71 points at 10,436
- Oil prices back up on Trump 'hit Iran hard' speech
- Lloyds leaves motor finance provisions unchanged
5.30pm: Footsie gains
Hopes that the US war in Iran could end soon saw global stocks move higher, with the FTSE 100 up 71 points at 10,436.
"Markets turned sharply risk-off as oil prices and the US dollar surged, while equities sold off following President Trump’s unexpectedly hawkish tone on the Middle East conflict, though US indices managed to claw back most of their intraday losses,” IG chief technical analyst Axel Rudolph said.
“As a result, the dollar gained on safe-haven demand and rising stagflation concerns, while crude rallied strongly on fears that significant volumes of oil could remain offline.”
4.18pm: London blue-chips firmly in green
The FTSE has flipped to what is heading towards a pretty strong session, having been down in the dumps early doors.
BP and Shell are still doing plenty of heavy lifting, both up 3.1% on the back of the gains in oil prices, and joined by plenty of others, with only around a third of the index in the red now.
Defensive stocks also have been supported all day, including Centrica, BAT, Tesco, BT and National Grid, as investors rotated into more stable sectors.
They have been joined by the big drug makers AstraZeneca and GSK, as well as others such as Rentokil, Pearson and LSEG, suggesting dip-buying after these names were hit in the weeks before the Iran war broke out.
Top of the leaderboard is 3i Group, which owns Dutch discounter Action, while fellow discount chain B&M is top of the FTSE 250 and Stoxx 600 risers.
On the European mainland, stock markets are cutting losses too.
Market analyst Danni Hewson at AJ Bell says the "prospect of further escalation over the weekend has seen many investors rush to take defensive positions".
This has sent many into the London benchmark's stocks, where Hewson says "the focus has been on stuff people can’t do without even when their cost of living is under pressure" suchh as utilities, tobacco, groceries.
"As traders prepare for the energy log jam in the Middle East to continue for several weeks, there’s likely to be a scramble for alternative supplies and that’s making US crude more attractive.
"Such a shift in the status quo has happened before during times of stress and could become further embedded if the conflict continues to hamper supply of seaborne oil."
The RAC has reported that the price at petrol pumps has jumped by a record amount in March, while the government hasn’t yet asked people to change their behaviour, unlike in other countries.
"The cost of filling up could make some reconsider Easter plans that might have included long journeys to visit friends and family," says Hewson.
"It’s hard to get a handle on exactly what could be heading our way, but the memories of autumn and winter 2022 are still close to the surface."
3.33pm: Tesla delivery miss
Tesla delivered 358,000 vehicles in the first quarter, below the 366,000 expected but 6% from a year ago.
The Shares are down 4%.
Market analyst Matt Britzman says: "On the face of it, this was a softer print, not just for deliveries but also for energy deployments, which came in below expectations."
He sees "some positives from the auto business" from the year-on-year improvement without the help of EV tax credits, "suggesting a solid level of underlying demand".
Production was also higher, which he says "suggests a degree of management confidence as we move into the next quarter".
Britzman, who flags that he owns shares in Tesla, says "a few thousand cars either way is unlikely to move the dial on valuation".
As he notes, the main investment case rests on what is coming next, ie the Robotaxi amnd humanoid robots.
The robotaxi rollout has been "a little underwhelming so far", he adds.
2.57pm: US stocks open lower, led by tech and travel
US stocks have started firmly in the red but as has often been the case of late, are quickly trimming losses.
The Dow Jones is down just over 1% and the S&P 500 just under that, while the Nasdaq is worst affected, down 1.4%.
Losses across the Nasdaq 100 were led by chipmakers and AI-linked names, with Micron down 6.7%, followed by Lam Research, ARM, Marvell and AMD.
Shopify was down 5.2%, AppLovin 4.7% and Palantir 3.8%, suggesting a wider rotation out of technology and momentum trades.
On the broader S&P, losses in travel stocks are most notable, with airlines and cruise companies leading declines, with United Airlines and Southwest Airlines both off more than 6%, while Carnival and Norwegian Cruise Line are down 5-6%.
Elsewhere, Robinhood slipped 6.4% and Coinbase 5.3%.
2.10pm: Risks to the upside for oil
UBS reckons Trump's speech on two-to-three more weeks of hard strikes on Iran does not materially change the dynamic for oil and gas markets.
The risk of escalation remains, though, with the bank pointing to a specific threat that has not yet been acted upon: Trump reiterated that if Iran does not agree to a deal within the stated timeframe, the US would strike the country's power plants.
Iran has previously said that any attack on its own energy infrastructure would prompt retaliation against regional energy assets.
UBS says that even if US military operations stop, the pace at which Iran allows tankers to resume passage will be the deciding factor, and without a formal agreement, that could take time.
Bloomberg reported this week that Iran is constructing a system under which ships wishing to transit Hormuz would need to come from countries it regards as friendly, and may face transit fees.
Whether Gulf states would accept such terms is unclear, with separate reports this week that the UAE is in discussions with the US and other allies about opening the strait by force.
UBS estimates that global oil inventories have likely fallen to their five-year average at the end of March and that if disruptions persist through April, stocks would drop below the bottom of the five-year range and prices could exceed $150 a barrel this month if there is no visible improvement.
1.34pm: WTI surges higher than Brent crude
Blue chips in London and Europe financial centres are sinking lower as the afternoon progresses, as things happen in oil prices.
The FTSE 100 is down 0.5%, with the FTSE 250 off 1.1%, while on the Continent the DAX and CAC 40 fall 2.3% and 1.4%.
In oil markets, Brent crude is up 7.8% at $109.10 a barrel and, unusually, US WTI has moved above the international gauge.
Front-month WTI is up almost 11% at over $111 a barrel.
WTI trading above Brent is rare as Brent typically carries a premium as the global seaborne benchmark, with the last sustained period being briefly during early 2020 around the market dislocation at the start of the Covid pandemic.
1.07pm: AI boosting second-hand clothing sales
An interesting report on how AI is helping the second-hand clothing industry - though not sure if there's any noticeable impact on high street clothing retailers.
“The industry continues to be robust and shows no signs of slowing down based on young people’s behaviour,” says James Reinhart of ThredUp.
He says AI is helping online platforms like his and rivals like Depop and Vinted, sort through and catalogue their massive inventory so that potential buyers can find them.
"Netflix and Spotify spend 15 to 20 years building data and algorithms to give you what you want. AI can do it almost instantly and that is pretty significant,” he says, per The Guardian's report.
He says AI is also helping by reducing the "friction" between seeing an item on social media and buying it, via AI-assisted image searches.
12.13pm: FTSE outperforming, US futures set to drop
Just after midday, the FTSE continues to bump along just below the waterline, though it is far outperforming European peers thanks to gains for oil giants BP and Shell, as well as the index's status as more of a defensive stronghold.
Germany's DAX is down just over 2%, while Italian and Spanish benchmarks are down 1.3% and France's 1.1%.
It's a similar story for US futures, with the Nasdaq set to drop around 1.7%, while Dow and S&P futures are respectively down 1.1% and 1.3%.
Of the big tech stocks, Nvidia and Alphabet shares are down around 2.1% in premarket trading, with Intel and Micron 3-4%.
11.28am: Lloyds outperforms other FTSE banks
Lloyds is the best performing of the London's blue-chip banks this morning, down just over 1%.
Investors are relieved about the earlier announcement that the lender is not currently planning to change its provisions for motor finance misselling.
Market analyst Russ Mould at AJ Bell says: "Details had shifted slightly from previous indications on average levels of compensation, but it seems Lloyds had been conservative enough in its assumptions to absorb this."
The wider banking sector is lower amidst broader market weakness relating to Iran, with HSBC and Standard Chartered both down more than 2%, while NatWest and Barclays have slipped around 1.4-1.5%.
On Lloyds, Mould says a "potential roadblock" for the motor finance issue is the risk of legal action from complainants unhappy with the FCA settlement, "and this may linger over the stock like nagging creaks in a car’s suspension for some time to come".
10.31am: BoE gets 'slight relief' but risk remains of rate hikes
The earlier BoE decision maker panel shows surging energy prices have boosted firms’ near-term inflation expectations, weighed on hiring plans, and led to a rise in businesses’ price-raising intentions over the coming year.
"But the MPC will take some comfort from expected pay growth ticking down, and businesses’ medium-term inflation expectations only inched up only slightly, suggesting that firms are yet to price in a prolonged inflation shock from higher energy costs and fractured supply chains," says Elliott Jordan-Doak, economist at Pantheon Macroeconomics.
That said, he notes that the jump in one-year-ahead CPI expectations of from 3% to 3.5%, the highest since December 2023, will "provide some pause for thought".
While more dovish members on the MPC will likely be tempted to discount that increase as news-driven noise for now, he says rate setters will be "acutely aware of other measures of households' inflation expectations jumping recently".
With expected wage growth ticking down to 3.4% in March from 3.5% will be "a relief for the MPC given it provides little suggestion that the anticipation of higher inflation is feeding into pay expectations, yet".
All told, the economist says the survey will be "a slight relief for the MPC given how quickly other measures of inflation expectations have surged since the war in Iran began.
"But we think the bulk of evidence suggests the risk of hikes in 2026 is greater than cuts.
"President Trump’s address last night suggests to us that disruptions to energy markets and supply chains will persist for some time, while households’ inflation expectations jumped sharply and businesses’ expectations have begun to rise.
"Granted, Andrew Bailey’s comments yesterday suggest that the MPC is uncomfortable with the market pricing two hikes. But we still expect rate setters to hike once this year, in June, before cutting twice in 2027 to leave interest rates at 3.50%, which we think is neutral.
"We see risks are skewed towards more cuts in 2027 than we expect, with rate setters potentially needing to take rates below neutral to stimulate demand."
10am: BoE finds firms plan to raise prices
The Bank of England’s Decision Maker Panel shows firms plan to raise their prices by 3.7% over the year from March, up from 3.4% in February.
The three-month average of firms’ own price expectations rose to 3.5% in March, from 3.4% in February, matching the consensus.
Companies' one-year ahead CPI inflation expectations rose to 3.5% in March, from 3.0% in February, in line with the consensus forecast.
Responses from over 2,000 firms were collected between 6 and 20 March.
9.36am: Housbuilders down
Housebuilders might seem to be down due to the sector showing its usual sensitivity to interest rates.
But Taylor Wimpey and Barratt Redrow are mainly down due to their shares going ex-dividend.
UK gilt yields are up this morning, but below the highs of last week.
9.01am: FTSE pares losses
After an hour of trading the FTSE 100 has pared most of its losses; now down 19 points at 10,345.5, with just over a third of shares in green, led by BP, Shell and BAT.
The FTSE 250 is down just over 200 points at 21,485, having been down more than 300 earlier.
Precioius metals miners Hochschild and Pan African Resources are the top fallers, down either side of 7%, followed by engineer Goodwin, lender OSB Group and life consolidator Chesnara.
US, UK and other government bond yields have climbed again on the back of Donald Trump's speech.
The US 10-year Treasury climbed to 4.37%, still below the highs seen at the end of last week, with the UK 10yr gilt yield inching up today to 4.825%, still well down from the 5%-plus seen last Friday.
Market analyst Richard Hunter at Interactive Investor says: “Investors had the wind taken out of their sails as the latest US Presidential address pointed to a continuation of the conflict.
"The remarks were made outside market hours, so Dow futures give a more reliable reflection of what is likely to happen today."
Dow Jones and S&P 500 futures are down around 0.96-1.0%, with the Nasdaq expected to fall 1.35%, erasing most of the gains made yesterday.
"An additional complication is that traders are unlikely to want exposure ahead of a long weekend, having been caught out by developments previously," Hunter says.
"This could add further downward pressure as the mood shifts once more to a risk-off approach."
He says the speech "contained little to reassure investors," with Trump's dismissal of responsibility for the Strait of Hormuz putting energy supply disruptions "firmly back on the agenda".
8.15am: Miners drag FTSE 100 lower at open
The FTSE 100 has slid 63 points lower to 10,301 in Thursday's opening trades.
Familiar faces leading on the downside are precious metals miners Fresnillo and Endeavour, both down almost 6%.
They are joined by base metals miners Antofagasta and Anglo American, housebuilder Barratt Redrow, wealth manager St James's Place and British Airways owner IAG.
Barratt is down as its shares have gone ex-dividend, with IMI and Smiths Group the same.
Sitting atop the risers list are BP and Shell, up 2.8% and 1.9%.
Defensives are up too, with British Gas owner Centrica, British American Tobacco, Coca-Cola Europacific, Tesco, Imperial Brands, United Utilities and BT all among the 22 index stocks in green at present.
Meanwhile, the dollar has been strengthening this morning, with the pound down almost 0.7% to $1.322 and the euro down 0.5% to $1.153, as traders reverse positions from yesterday.
8am: SSE and SpaceX
A couple of items before markets open.
SSE PLC (LSE:SSE) said earnings for the just-completed financial year are expected to come in 5.5-8.6% lower than last year as it continues investment across its energy networks and renewables businesses.
Adjusted earnings per share of between 147p and 152p are expected for the year to 31 March 2026, down from the 160.9p made the previous year but with the lower end lifted from its previous 144-152p guidance. Consensus expectations are for around 150p.
The FTSE 100 renewable energy producer and transmitter said it remains on track with its five-year £33 billion investment plan, with capital spending for the year expected to total around £3.5 billion.
Elsewhere, Elon Musk's SpaceX chose the day of Nasa's Artemis II lunar launch to file confidentially for what could become the largest initial public offering in history.
The company submitted its filing to the Securities and Exchange Commission on Wednesday, with Bloomberg News reporting it is targeting a June listing and expects to raise up to $75 billion.
7.40am: Lloyds keeps motor finance provisions unchanged
Lloyds Banking Group PLC (LSE:LLOY) said it "does not currently believe" it will need to make any change to its provisions for the motor finance compensation scheme, following the final guidance issued by the financial watchdog at the start of the week.
The Financial Conduct Authority said on Monday night that millions of motor finance customers should receive larger compensation than its previous guidance in October.
After carrying out an assessment of the implications and impact of the final rules, Lloyds said some things remained uncertain, including the rate of customer responses, operational costs and whether any litigation ensues.
7.28am: Markets 'back to where they were'
Donald Trump "did nothing of what was expected in his speech", says market analyst Chris Beauchamp at IG.
"Instead of 'no more war', we got 'no, more war!', with heavier strikes expected and a fresh warning of attacks on power plants.
"This leaves markets back where they were last week, and now we have to price in hundreds of millions of barrels of oil that aren't coming out any time soon.
"The gloomy predictions of last week would have been perhaps misplaced if Trump had signalled a quick end, but now markets are back to pricing in economic catastrophe."
7.16am: Asian markets tumble after Trump speech
The FTSE 100 is predicted to fall fairly steeply on Thursday morning as oil prices rose after Donald Trump said in a speech overnight that the US "will hit Iran extremely hard over the next two to three weeks" to bring an end to the war.
A fall of 84 points has been called for London's blue-chip index, following a day when it bounded over 188 points higher to close at 10,364.79.
Markets had been buoyed by what had seemed like growing hopes for a potential diplomatic off-ramp in the Iran hostilities, with US stocks closed higher overnight too.
The Nasdaq climbed 1.2%, the S&P 500 rose 0.7% and the Dow Jones aded 0.5%.
But Asian markets are all down sharply this morning, with Japan's Nikkei falling 2.6%, India's Sensex down 2% and China's Shanghai and Hang Seng indices both down over 1%.
Oil prices are up, with Brent crude jumping 6.5% to $107.75 a barrel, while gold and silver are down 4% and 6.4%, with copper down 1.8%.
Markets do not like the sound of President Trump's reiterated threat to hit Iran’s power plants and other civilian infrastructure if there is no deal negotiated to end the Iran war.