- FTSE down 87 points at 10,348
- Oil and gas prices remain elevated
- Pres Trump set a 1am GMT deadline for Iran deal
5.30pm: Stocks pull back
Uncertainty weighed on global markets ahead of Trump’s deadline for Iran to reopen the Strait of Hormuz.
The FTSE 100 fell 87 points to close at 10,348. Over on Wall Street, the Nasdaq was down 0.5%, the Dow Jones was down 0.4% and the S&P 500 fell 0.3%.
4.03pm: Defence and aerospace stocks slide
Investors seem to be betting on a downturn in defence and aerospace spending - that's one potential reading of the fact that Melrose Industries, Rolls-Royce and Babcock are the biggest fallers on the FTSE, down between 4% and 3%.
Melrose and Rolls both are more civilian airline-focused, while Babcock mostly makes is money from the defence sector.
Housebuilders Barratt and Persimmon are also among the bigger fallers, along with industrial exporters Spirax and Hala, retail-focused M&S, 3i Group and Burberry.
At the other end, BP and Shell are among the blue-chip risers, which number just under 20, topped by Games Workshop, Imperial Brands, Metlen Energy and Scottish Mortgage.
Brent crude oil is continuing to oscillate around $111 a barrel as it did around this morning's open.
Market analyst Axel Rudolph at IG says markets are "on edge" as the clock ticks down to President Trump’s deadline for Iran to reach an agreement on the Strait of Hormuz.
Reports of explosions at Iran’s key Kharg Island oil hub and retaliatory drones and missiles fired at Israel and Saudi Arabia has "reverberated across financial markets".
The risk-off sentiment came "despite pockets of corporate optimism", he says, with comments by vice-president JD Vance saying that "very shortly, this war will conclude".
3.17pm: Buying opportunities and forecast cuts
Some of the interesting broker notes today.
Investors should use the current market weakness as a buying opportunity, JP Morgan's equity strategy team says, arguing that the economic backdrop underpinning the sell-off is not like the damaging stagflationary environment of 2022 that inflicted prolonged losses across both equity and bond markets.
The fundamental picture entering the Iran conflict had been strongly supportive, is the core view, with the bank not seeing stagflation as the most likely outcome in the second half of the year.
Focusing on gold mining stocks, JPMorgan reckons the pullback has created a compelling buying opportunity.
Analysts argue the sector’s recent slump fits a familiar market-shock pattern rather than signalling any breakdown in gold’s safe-haven case.
If the March consumer downturn persists, Next is among the best placed retailers to weather these conditions, RBC Capital Markets says.
Analysts warn that weaker players will fall further behind as spending tightens, as shoppers become more price sensitive and selective, with Next identified as a stock to buy on recent weakness.
UBS has nudged down its price targets on Premier Inn owner Whitbread and Holiday Inn owner IHG.
Profit forecasts for Whitbread have been reduced through to 2028, citing a lacklustre start to the year for UK hotel room rates and a growing list of economic headwinds facing the business.
As for Intercontinental Hotels, it is seen as facing a more uncertain outlook despite solid trading in its core US market, as geopolitical tensions begin to weigh on global travel demand.
2.48pm: Wall Street opens lower
US stocks have fallen in early trading, with the Nasdaq sliding 0.8%, the Dow Jones down 0.7% and the S&P 500 off 0.6%.
Losses on the Nasdaq 100 were led by Alnylam Pharmaceuticals, down 4.7%, followed by Arm Holdings, down 4.5%.
Apple fell 2.3%, with drops for other big tech such as Tesla, Shopify and PayPal, alongside healthcare names such as Amgen and Gilead, signalling a wider risk-off move.
2.10pm: Bipolar Trump
President Trump has posted on social media where he starts grimly threatening but turns optimistic half way through, saying he remains hopeful of some sort of deal with Iran.
"A whole civilization will die tonight, never to be brought back again," he said in the Truth Social post. "I don’t want that to happen, but it probably will."
He says the war has brought about "complete and total regime change, where different, smarter, and less radicalized minds prevail, maybe something revolutionarily wonderful can happen".
Trump says tonight's deadline is "one of the most important moments in the long and complex history of the world" and that "47 years of extortion, corruption, and death, will finally end", finishing with a twist on his usual sign off. "God Bless the Great People of Iran!"
Reports from Iran news agencies suggest US-Israeli missiles have hit the Kharg Island oil terminal, ahead of tonight's deadline.
"The American-Zionist enemy has carried out several attacks on Kharg island, and several explosions have been heard there," Iran’s Mehr news agency reported.
12.51pm: Iran and Israel not waiting for Trump deadline
Recent reports from Iranian sources suggest Tehran has rejected a temporary ceasefire and set strict conditions for talks, including an immediate halt to strikes.
Meanwhile, just before publication, Israel said it had carried out strikes on key infrastructure across Iran, including on bridges and transport links.
A warning from the Islamic Revolutionary Guard Corps was shared on local media, that "America’s regional partners should also know that until now, we exercised great restraint for the sake of good neighborly relations and had several considerations in choosing strike targets, but all those considerations have now been removed.”
This was despite indications that the US, Iran and international mediators had been discussing a possible 45-day ceasefire framework that could eventually lead to a permanent resolution. A separate plan reportedly brokered by Pakistan had also been said to be under review.
"Traders appeared to be sitting on their hands ahead of President Trump’s deadline for Iran to reopen the Strait of Hormuz," says market analyst David Morrison at Trade Nation.
Despite this risk of a serious escalation in hostilities, the US dollar was weaker this morning, but has ticked higher in the past couple of hours.
12.14pm: FTSE in red as Iran situation and oil dominate
The FTSE has dropped back into negative territory as a few heavyweights tip the index off its former island of serenity, as oil creeps back up.
Defence and aerospace names are leading the fallers, with Rolls-Royce down 3.1%, Babcock off 2.3% and BAE Systems lower, as the sector pulled back after recent gains.
Cyclical and financial stocks were also weaker, while miners such as Endeavour and Fresnillo remain in the red as the dollar weighs on metals prices.
Roughly half the FTSE top 20 largest stocks are in the red, with the defence giants joined by drugmakers AstraZeneca and GSK, and lenders Lloyds and NatWest.
Bond markets have been up and down this morning, as the situation in the Middle East remains unclear.
Market analyst Kathleen Brooks at XTB says markets are "wavering" and "in limbo", with focus remaining firmly on Iran.
"The market is braced for a couple of outcomes," she says. "1, the US continue with strikes on Iran, dashing hopes for a ceasefire, which could weigh heavily on risk sentiment and push up oil prices later or 2, Donald Trump does another ‘TACO’ later today, including extending the deadline for Iran to reopen the Strait, which could ease upward pressure on oil and help risk sentiment to recover."
She adds that the war in the Middle East is "one long deadline after another and there is a constant stream of promises to end the war coming out of the White House. Ultimately no one knows that the President will do next, and this is causing tensions to remain high in financial markets".
US WTI oil is continuing to trade at a premium to Brent crude, currently at $114.6 versus $110.4 a barrel, an unusual situation as Brent usually trades higher.
"The reason for this anomaly is due to the differences between how the two contracts work," Brooks notes, as the front-month WTI contract is for oil delivered in May, while the Brent contract is for June.
The oil market is currently in "backwardation", whereby current spot prices for oil are higher than futures prices, which indicates immediate supply shortages and is a sign that traders hope that oil prices will be lower in the future.
"This is also a sign that traders remain hopeful that the conflict will be over with the next two months. Ultimately, it is hard to see the oil market shift out of backwardation until there is a breakthrough in negotiations between Iran and the US, or until the Strait of Hormuz is back open.
"If the Strait does open soon, then the price of WTI is likely to fall sharply and Brent’s positive premium could return."
11.11am: Oil volatile
Oil prices have been volatile this morning.
At around midday yesterday Brent stood at just under $109 a barrel, which rose to over $111.5 by 9am this morning, then by 10.30am the price had dropped to $107.5.
But then in the past half hour the price has bounced back above $109 a barrel.
The most recent newswire reports, citing a senior Iranian source, suggest Tehran rejected a temporary ceasefire and set strict preconditions for talks with the US, including an immediate halt to strikes and guarantees they will not resume.
President Trump said yesterday Iran could be "taken out in one night," which "might" be following the Tuesday 1am GMT deadline he set the Strait of Hormuz to be reopened.
10.12am: Markets in wait-and-see mode
Stock markets are fairly "steady", says market analyst Dan Coatsworth at AJ Bell, who sees investors a "largely non-committal as they await the apparent cliff-edge deadline imposed by the Trump administration".
President Trump’s threats of widespread strikes on Iran's civilian infrastructure if the Strait of Hormuz is not reopened by 1am GMT "if taken at face value, create the conditions for a binary set of outcomes", he says.
"Either there is a climbdown on the part of Washington or Tehran, which could prompt a major rally in equities and easing of energy prices, or a major escalation with all the implications that might have for financial markets.
"An alternative scenario is that the deadline is extended, and the markets face another uneasy period of trying to gauge the latest mood music in the US and Iran."
With oil prices hovering around the $110 per barrel mark, Coatsworth says it is "striking how far energy markets are from pricing in a dampening down in Middle East tensions", while gold is retreating on continued strength in the dollar and the potential for interest rate hikes, factors which he says outweigh any safe-haven attractions during the current crisis.
9.39am: Best ever month for UK electric car sales
UK new car registrations rose 10.1% year-on-year in March, down from growth of 17.6% in February.
This is part of the new data shared by the industry's lobbying body, the Society of Motor Manufacturers & Traders (SMMT), which shows that total registrations, which also includes business and fleet sales, rose 6.6% in March, up from a 7.2% gain in February.
It was the best ever month for battery electric vehicle sales, with BEV volumes up 24.2% to a record high of 86,120 registrations.
Total BEV and hybrid sales hit 196,059. This was a market share of 22.6%, still well below the government's mandated target for the year of 33%.
Despite rising EV volumes, the SMMT said conditions have "diverged sharply from those assumed when the mandate was set", with battery costs up over 30% more than expected and industrial energy prices around 80% above 2021 levels, with some public charging costing over 140% more than it did five years ago.
SMMT boss Mike Hawes says an "urgent review of the transition is required to secure a sustainable market, economic growth and the UK’s net zero ambitions".
8.52am: Miners and builders drag FTSE down
Now the FTSE has dropped into the red, led by precious metals miners, travel groups and housebuilders.
Miners Endeavour and Fresnillo are down 2.2% and 1.8%.
InterContinental Hotels is down 2%, while aerospace parts suppliers Melrose and Rolls-Royce are down, along with defence contractor Babcock, between 1.1% and 1.3%.
Housebuilders Persimmon and Barratt Redrow, utilities SSE and UU, bookmaker Entain and Compass are also among the top fallers.
8.15am: Shell and BP get FTSE off to positive start
The FTSE 100 has risen 14 points to 10,450 in opening trades.
Oil behemoths Shell and BP are doing most of the heavy lifting, up 1.2% and 1.4%.
Top of the leaderboard is Scottish Mortgage Investment Trust, a major shareholder in SpaceX, as more details are shared on Elon Musk's rocket company and its targeted $1.75 trillion IPO.
7.56am: Hunting and Universal Music
It's a very quiet morning in terms of company news, particularly for FTSE 350 companies.
Extra attention for Hunting then, as it flags winning almost $68 million of orders for a new offshore development in Guyana, most of which are for its titanium stress joint (TSJ) product line, which is used on floating, production and storage vessels.
Elsewhere, WH Smith has confirmed that Leo Quinn assumes his role of executive chair today, with Andrew Harrison stepping down from the board and resuming his role as UK divisional CEO.
Looking further afield, Bill Ackman’s Pershing Square said it is planning to buy Universal Music Group in a cash and shares deal, where shareholders will get €9.4 billion in cash and 0.77 shares of new stock for each share they hold.
7.29am: UK financial services had best quarter in 30 years
A sliver of good news comes from the CBI this morning, where its long-running survey finds that financial services activity rebounded sharply in the first quarter, with business volumes rising at the fastest pace since 1996.
Sentiment also turned positive for the first time since mid-2024, while profitability recovered after a prolonged decline, pointing to a stronger start to the year.
However, pressure on margins intensified, with average spreads narrowing at the fastest rate since late 2024.
Firms expect growth to continue next quarter, though uncertainty around demand has understandably surged in the past month due to the war in the Middle East, with concerns at their highest level since 2012.
"The sector still appears to be digesting the implications of conflict in the Middle East. This is not surprising given that financial services firms are at the epicentre of volatile market moves, and that the economic impact of the conflict is still crystallising," says CBI deputy chief economist, Alpesh Paleja.
The CBI wants the government to "double down" on delivering its financial services growth and competitiveness strategy, with priorities including continuing work to streamline unnecessary regulation, accelerating delivery of the Mansion House reforms, and deploying capital through finance programmes such as the British Business Bank.
7.16am: FTSE 100 set to start week lower
The FTSE 100 has been predicted to start its holiday-shortened week slightly in the red, as markets eye Donald Trump's deadline tonight for Iran to agree a deal.
The US President has threatened that if an agreement is not made before 8pm Eastern Time tonight (1am London), the country's bridges and power plants will be destroyed.
London's blue-chip share index is down 14 points on the futures market, having rebounded roughly 464 points last week to 10,436.29.
US stock markets were open on Monday while Europe took an extra day off for Easter, with the tech-powered Nasdaq adding 0.5%, the S&P 500 and Dow Jones edging up 0.4%.
Asian stocks are mixed this morning, with the Hang Seng down 0.7% in Hong Kong, but Japan's Nikkei and Korea's Kospi up 0.2% and 0.6%.
Brent crude oil has climbed back above $111 a barrel this morning, after trading as low $107 yesterday.
"Sentiment has turned more cautious this morning as investors grapple with President Trump’s new deadline," says macro analyst Jim Reid at Deutsche Bank.
"In terms of Trump’s latest ultimatum to Iran, the US President shared the 8pm ET Tuesday deadline on social media on Sunday and then referred to it several times yesterday as he demanded that Iran strikes a deal that 'that's acceptable to me', while threatening intensified attacks against Iran that would destroy 'every bridge' and take 'every power plant' out of business.
"Notably, Trump said that a deal should include 'free traffic of oil', calling reopening the Strait of Hormuz 'a very big priority'.
"So a seeming shift from previous suggestions that reopening the straits was not a core objective for the US."