- FTSE up 30 points to 10,589
- US and Iran may extend ceasefire to enable peace talks
- Tesco, easyJet, Entain and Rentokil release results
5.05pm: Stocks edge higher
A lack of news on talks between the US and Iran saw stocks lose steam on Thrusday, with the FTSE 100 paring earlier gains to close up 30 points at 10,589.
“Headlines can only drive a market so far. Having posted an eye-watering surge from the end of March, equity markets now need substantive progress in talks if the recovery is to make further progress,” IG’s chief market analyst Chris Beauchamp said.
“Without it, investors will soon start to fret about the impact on the global economy of the straits closure, though in fairness that is a problem that needs navigating sooner or later.”
4.14pm: FTSE gains trimmed as oil climbs
London blue-chips have given back a good portion of their gains from earlier in the afternoon.
This comes as oil prices rose on the back of an aggressive speech from the US defence secretary earlier. BP and Shell have joined the bigger risers.
Brent crude has climbed to above $98 a barrel, from below $95 earlier. It follows Pete Hegseth saying the US is "reloading with more power than ever before". He said Iran could settle the conflict “the nice way,” through a deal, “or we can do it the hard way.”
The picture on Wall Street has shifted as well, with the Nasdaq climbing out of the red, up 0.3%, with the S&P in a similar position.
Fallers include precious metals miners, with Fresnillo down 3%, while defence and aerospace names are notable, namely Rolls-Royce and Babcock, as well as utilities such as Airtel Africa and SSE.
A cluster of FTSE names have gone ex-dividend, including Diageo, LSEG and Antofagasta, accounting for around 3.8 points of downside on the index.
2.40pm: Mixed Wall Street start
It's a mixed open for US stocks.
The Dow Jones has begun by rebounding from yesterday's dip, up 0.3%.
The S&P 500 is stepping further into record territory, up 0.15%.
And the Nasdaq is starting in the red, down 0.1%.
Chip stocks lead losses on the Nasdaq, with Nvidia, ASML and Micron all lower as investors take profits after the recent rally.
Gains are more selective, with Microsoft, AMD and Palantir higher.
Back in London, the FTSE, which was up 83 points, has seen its gains trimmed slightly.
2.01pm: BP gets an upgrade
UBS has upgraded BP from 'neutral' to 'buy' and lifted its price target from 650p to 700p, arguing that new chief executive Meg O'Neill has a clear opportunity to reverse years of disappointing returns since taking the reins in April.
The elevated oil price, driven by the ongoing conflict in the Middle East, provided an additional tailwind.
BP's shares have lagged behind rivals including ExxonMobil, Shell and TotalEnergies by more than 50% since 2018, a period marked by costly and largely unsuccessful investments in renewable energy, a bloated cost base and a heavily indebted balance sheet.
UBS argues all three of those problems are now improving.
1.18pm: Some flights in Europe could be cancelled due to jet fuel shortage
Europe has "maybe six weeks or so [of] jet fuel left", the boss of the International Energy Agency has warned.
IEA executive director Fatih Birol said the closure of the Strait of Hormuz is likely to result in "the largest energy crisis we have ever faced".
In an interview with the Associated Press, Birol said: "In the past there was a group called ‘Dire Straits.’ It’s a dire strait now, and it is going to have major implications for the global economy.
"And the longer it goes, the worse it will be for the economic growth and inflation around the world."
The economic impact includes higher petrol prices, higher gas prices, high electricity prices, with some parts of the world hit worse than others.
If the strait is not reopened, he said that for Europe, "soon we will hear the news that some of the flights from city A to city B might be canceled as a result of lack of jet fuel".
Earlier, easyJet said the war in the Middle East and rising fuel costs are already hitting bookings.
12.07pm: Some wind in the FTSE sails
The FTSE 100 is getting some wind behind it as we trundle past midday in London.
Helping lift the index is an easing in government borrowing costs, with bond-sensitive stocks including property developers and housebuilders prominent among the risers.
Top of the leaderboard is Intertek again, with the testing and assurance group acquiring a solar testing lab in India, targeting growing demand from the country’s fast-expanding solar market.
Investor sentiment is "broadly positive", says market analyst David Morrison at Trade Nation, while noting that while US and some other global stock indices hit record highs, the Euro Stoxx 50, German DAX and FTSE 100 remain significantly below their all-time highs from earlier this year.
"In addition, all look as if their rallies from late March are losing momentum while the US majors appear unstoppable.
"It appears that European investors are exercising some caution and taking some money off the table following a strong run over the past fortnight.
"It will be interesting to see if this proves to be a sensible move or provides evidence that European investors are unnecessarily cautious when compared with their American cousins."
Investors may be thinking that Europe could be more affected by potential energy side effects from the war in the Middle East.
While investors seem to be "aggressively ‘risk on’ when it comes to equities", he contrasts this with a pick-up in the US dollar that suggests "that there’s still some caution out there as, despite assurances from President Trump, the war with Iran is ongoing, the ceasefire is fragile and the Strait of Hormuz remains blocked to most shipping".
"At its most basic, prices don’t move in straight lines. The US dollar rallied sharply when hostilities broke out and fell back quickly on expectations of a short war. Prices have risen as buyers came in to take profits on shorts or establish fresh long positions as support held."
11.36am: easyJet downgrades expected
Deutsche Bank analyst Jaime Rowbotham says when easyJet refers to "near-term uncertainty in customer demand" due to the conflict in the Middle East, it means it is "making it hard to pass on elevated fuel costs".
He says his current assumption is jet fuel prices are $1,150/mt for the rest of summer (easyJet's 2H), which would imply around £180 million or 50% potential downside risk to his FY26 PBT estimate of £360 million, which is below the Bloomberg consensus of £403 million.
"In addition, were we to assume -1% for 2H RASK [revenue per available seat kilometre] instead of our current assumption of +2%, this would reduce FY26 PBT by a similar amount.
"We think it's reasonable to infer that there will be material downgrades to consensus FY26 PBT expectations.
"However, at yesterday's close the shares were down 18% since the conflict began and easyJet reminds that its balance sheet is strong (investment grade, with £4.7bn liquidity)."
Rowbotham keeps his 'sell' rating in place.
11.05am: Movers
Some more movers.
Morgan Sindall shares have been lifted almost 10% as the construction services group said full-year pre-tax profit would be significantly ahead of previous expectations.
The Fit Out division is the standout performer, with profits now expected to significantly exceed the top end of the division's medium-term target as confidence levels improved in the conversion of preferred bidder work and future tender opportunities.
Analyst Andrew Nussey at Peel Hunt says he expects to lift his pre-tax profit forecast by 8-9% following the trading update, resulting in earnings per share of approximately 360p.
Shares in Animalcare Group scampered 35% higher after the animal health company agreed to a £235.2 million takeover by private equity firm Charterhouse Capital Partners.
Elsewhere, CAB Payments is up 10% after the board unanimously rejected a £241 million bid from Nasdaq-listed StoneX, saying the offer significantly undervalues the cross-border payments specialist.
Narf Industries rose 23% earlier, now nearer 11%, after the cybersecurity group reported a 40% increase in full-year revenue and announced a new government contract worth more than $2.5 million.
Sovereign Metals is up 10% after publishing a definitive feasibility study for its Kasiya rutile and graphite project in Malawi, confirming a pre-tax net present value of $2.2 billion.
10.46am: Flutter hit by Citi double-downgrade
Shares in Flutter Entertainment are down 1.8% after the Betfair and Paddy Power owner was double-downgraded by Citi from 'buy' to 'sell', citing growing doubts about the pace of growth in its crucial US business, FanDuel.
Its price target was more than halved from £158 to £68, as Citi has become sceptical about Flutter's ability to hit its own profit targets in the US, where the company operates FanDuel, the leading online sports betting and casino brand.
Flutter's management has guided for US adjusted operating profit of between $850 million and $1.25 billion for 2026, but Citi's own forecast of $763 million sits well below that range.
10.28am: Dunelm drops
Dunelm Group shares are down 4.3% after the homewares retailer reported third-quarter sales growth of 2.1%, an improvement on the second quarter but below the 3.6% of the first-half.
Management has lowered the profit outlook, seeing it now likely to come in towards the lower end of guidance at around £210-217 million, reflecting weaker consumer confidence and a tougher backdrop.
Margins improved slightly, though customers are increasingly trading down into discounted products.
CEO Clo Moriarty, who joined from Sainsbury's in October, said: "Although the external environment is not helpful in the short term, we continue to focus on the areas within our control - strengthening our proposition while operating efficiently and effectively.
"Alongside this, we are making good progress building our long‑term growth plans with some exciting developments beginning to emerge, including a much stronger store opening pipeline and some encouraging early results from our recently launched app."
Analysts at Jefferies added that softer conditions are sector-wide rather than specific to Dunelm.
10.12am: UK food disruption planning, Tesco says 'no supply chain issues'
The government has confirmed contingency planning is underway for potential food supply disruption if the Iran conflict escalates, after reports of a “reasonable worst-case scenario” this summer.
Business secretary Peter Kyle told Sky News and Times Radio the government is actively modelling risks, including a sharp drop in carbon dioxide supplies used across the food industry.
Officials are preparing for reduced product variety rather than widespread shortages, with farming and hospitality among the most exposed if disruption to the Strait of Hormuz continues.
Kyle notes that last month his department provided three months of funding to restart the Ensus bio-ethanol plant in Teesside to secure domestic carbon dioxide supplies amid shortages caused by the war in Iran.
"People should be reassured that we are doing this kind of action behind the scenes to keep resilience in our economy, so that when the full extent of what may or may not emerge, because this situation is still unfolding in the Middle East, you have a government that is acting with creativity and boldness," he said on Times Radio.
Following that, he said to Sky News that there was "not a concern for our economy" at the moment about a potential lack of industrial CO2.
Tesco CEO Ken Murphy also told journalists on the conference call after results that the grocer was "in good shape in terms of stocks".
"We have no issues in our supply chain at the moment," he said, with "no concern from any of our suppliers or growers".
9.34am: Un-easyJet
On the FTSE 250, easyJet shares have dropped 2.1% after the budget airline said that first-half losses are likely to widen due to the war in Iran ramping up jet fuel costs.
A headline pre-tax loss of £540-560 million is expected for the six months to March, up from the headline loss of £394 million a year ago.
Analyst Gerland Khoo at Panmure Liberum says the war in the Middle East was not just leading to higher fuel costs, but also having "a larger and more persistent adverse impact on forward bookings".
While late demand was strong in March, "there is reduced visibility from later bookings", with bookings for the second half of the year currently around 2 percentage points lower than last year.
Khoo says he has made "significant cuts" to his forecasts to reflect weaker unit revenue assumptions this year, but expects demand to be resilient, "but it may require price stimulation in the short term".
9.13am: FTSE edging higher as world markets hit records
After just over an hour of trading, the FTSE 100 is up 18 points at 10,578, with Entain, Halma and Tesco top of the leaderboard.
Gains for miners are continuing to provide support, while energy giants BP and Shell are offsetting each other, and banks are mixed too.
It's a similar picture in mainland Europe, with Germany's DAX up 0.15% and France's CAC up 0.4%.
US futures are flat to up, with the Dow Jones flat but the Nasdaq 100 expected to edge up another 0.4% into record territory.
Investors, particularly in US tech, are betting that "the war is over", says market analyst Neil Wilson at Saxo, saying that this morning's reports that a ceasefire extension could be agreed to enable more talks are "less important to the market than the direction of travel".
This is "allowing investors to refocus attention on tech, AI and a broadening out of the bull market", with not just the S&P and Nasdaq hitting new records, but Japan’s Nikkei 225 following suit and the MSCI All-Country World index making its 10th straight gain to reach a new all-time high too.
Brent crude oil futures have remained steady around the $95-96 mark, while the dollar is edging higher.
Wilson says the FTSE 100 status has turned to laggard as markets regain optimism – "all those defensives and oil majors now struggling to ride the risk elevator".
8.33am: GDP analysis
Some thoughts on the UK GDP figures earlier.
Market analyst Matthew Ryan at Ebury says the economy found "some surprise momentum" following a lacklustre start to 2026.
"The crucial services sector performed well, with consumer spending supported by the pre-war drop in inflation, which eased to within 1 percentage point of target at the start of 2026."
He says this is "probably where the good news ends", as March heralded the start of the Iran war, "which is likely to have triggered a confidence shock, higher energy costs and a jump in inflation. With February likely being a peak rather than a trend, we think that either stagnation or a mild outright contraction in the economy seems likely in March."
Rob Morgan at Charles Stanley adds: "As the conflict in the Middle East hopefully draws to close, the longer-term consequences are still unfolding."
The impact from the increase in oil and gas prices won’t start to show in the growth figures until the March data is released next month "but given the lengthy disruption to oil and gas trade, a higher base for energy prices, and costs for businesses and consumers, is already baked in".
He says the UK is "vulnerable to elevated energy costs owing to its reliance on imports and comparative lack of storage capacity", which is why rises in oil and gas prices have been felt so quickly at the forecourts and "are likely to feed into household energy bills if the fallout of the crisis drags on".
But if energy prices retreat, the British economy "could weather the storm reasonably well and even regain some momentum later in the year", he says.
China GDP growth of 5.0% for the first quarter was released even earlier.
Economist Lynn Song at ING says: "It's likely that 1Q26 growth is mostly insulated from the negative impact of the Iran war. China is well-placed to weather short-term disruptions, but could face more pressure if energy prices remain higher for longer.
"We could see a greater impact of higher prices on import costs and input costs in the months ahead.
"However, for now, this above-expectation growth at the start of the year is positive news for China's growth, helping it achieve this year's growth target of 4.5-5.0%. It gives policymakers some buffer to work with and potentially reducing the urgency to ramp up more aggressive stimulus."
8.15am: FTSE inches higher at open
The FTSE 100 has opened 26 points higher at just under 10,585.
Tesco is top of the early risers, up 3.2%as its full-year results went down well.
Entain is up there, up 2.4% as it kept guidance unchanged as good first-quarter volumes offset weaker margins.
Miners are also providing some oomph for the index, with Rio Tinto and Anglo American rising 2.1% and 1.6%, possibly on the back of the China GDP numbers.
7.43am: A Tesco beat
Tesco has reported profits ahead of expectations after a year of investment in lower prices helped lift market share.
Adjusted operating profit edged up 0.6% at constant currency to £3.15 billion, above its previous guidance of £2.9-3.1 billion, as sales excluding fuel rose 4.3% to £66.6 billion and like-for-like sales increased 3.5%.
Free cash flow came in at £1.96 billion, up 11.8% and exceeding its guidance for between £1.4 billion and £1.8 billion.
Chief executive Ken Murphy said customers were shopping more with Tesco as the group invested in price and quality, helping it reach its highest market share in more than a decade.
The group also lifted its medium-term cash flow guidance.
7.24am: UK GDP improves
The economy grew 0.5% in the three months to February, according to fresh data from the Office for National Statistics this morning.
Gross domestic product improved from 0.3% in the three months to January, which was revised up from 0.2% in the previous estimate, and no growth in the three months to December, which was revised down from 0.1%.
Services output grew 0.5%, up from 0.3%, while industrial production grew 1.2%, down from 1.7%.
Construction output fell 2.0%, following falls of 2.8% in the three months to January and December, with both prior falls revised down previous estimates.
ONS chief economist Grant Fitzner said: “Growth increased further in the three months to February led by broad-based increases across services.
“Within services,;growth was driven by wholesaling, arket research, hospitality, and publishing, which all performed well in the three months to February. Meanwhile car production recovered from the effects of the autumn cyber incident.
"Growth in services and production was partially offset by another fall in construction, albeit at a slower rate than previously, with leasing and intellectual property licencing also continuing to contract.”
7.18am: FTSE handbrake still on despite surges elsewhere
The FTSE 100 is expected to come out of the gates at a crawl on Thursday, despite an uneven rally on Wall Street overnight that has continued with Asian stocks this morning.
A loss of around six points has been predicted for the London index on the futures market, after it dropped 49.5 points yesterday to close at 10,559.58.
The tone on Wall Street overnight was mostly upbeat as investor optimism was boosted by comments from Donald Trump about upcoming US-Iran truce talks.
The S&P 500 climbed 0.8% to above 7,000 for the first time, while the Nasdaq jumped 1.6% to also hit its own record high, while the Dow Jones slipping 0.2% as energy firms and banks declined.
As pointed out by Deutsche Bank, the S&P closed an 8-month low at the end of March and after 11 business days finished at a new all-time high of 7,023, a swing of 10.7%.
The rally is continuing in Asia this morning with Japan's Nikkei up 2.4%, Korea's Kospi 1.9% and Hong Kong's Hang Seng 1.6%.
China revealed GDP grew 5.0% year-on-year in the first quarter, surpassing forecasts of a 4.8% increase and improving from 4.5% growth the preceding quarter.