London stocks edge lower as geopolitical concerns offset gains in midcaps

London's FTSE 100 traded lower on Thursday as escalating tensions between the United States and Iran weighed on investor sentiment, while losses in technology stocks added further pressure to the blue-chip index.

The FTSE 100 declined 0.2% to 10,492.99 points by 1038 GMT as investors adopted a cautious approach amid rising geopolitical uncertainty.

Iran tensions dampen investor confidence

Market sentiment weakened after Iran described the Strait of Hormuz as an inviolable red line.

The warning came after US President Donald Trump threatened to attack Iran's infrastructure.

Iran said that if Trump carried out the threat, it would strike all infrastructure across the Gulf region.

The developments prompted investors to reduce exposure to riskier assets, contributing to weakness across European markets.

Technology stocks lead declines

Technology stocks were among the biggest drags on the FTSE 100.

Shares of data and technology company Experian fell 2.3% after the company reported first-quarter results that were in line with expectations while maintaining its annual outlook.

Peer company RELX also traded lower, shedding 1% during the session.

The weakness in technology stocks contributed significantly to the decline in the benchmark index.

FTSE 250 gains as Rotork surges

While the FTSE 100 remained under pressure, the domestically focused FTSE 250 outperformed, rising 0.3%.

The midcap index was supported by a sharp rally in Rotork shares, which jumped 66.8%.

The gain followed Swiss engineering group ABB's announcement that it would acquire the British automation company in a deal valued at $5.5 billion.

The takeover announcement provided a significant boost to the FTSE 250, offsetting broader market caution.

UK economy shows modest growth

Economic data released on Thursday showed that Britain's economy recorded only minimal growth in May.

Growth was supported by expansion in the services sector, while other parts of the economy contracted.

The figures suggested that business confidence remained fragile amid continued geopolitical uncertainty surrounding the conflict involving Iran and political changes at home following a change of prime minister.

Ocado plunges to 13-year low

Among individual stocks, Ocado was one of the session's worst performers.

Shares of the British online grocery and technology group tumbled 18.8%, hitting their lowest level in 13 years.

The decline came after the company failed to demonstrate tangible progress in discussions aimed at securing new US partners.

Investors viewed the lack of advancement as a setback for Ocado's efforts to strengthen its business and compete more effectively with rapid delivery companies.

Elsewhere, shares of Frasers Group fell 5.4% after the British retailer declined to provide a fiscal 2027 outlook.

Overall, geopolitical concerns, weakness in technology stocks and company-specific disappointments kept the FTSE 100 under pressure, although gains in the FTSE 250 highlighted continued investor interest in stocks supported by corporate deal activity.