FTSE 100 falls as renewed US-Iran strikes hit market sentiment

Britain’s benchmark FTSE 100 index fell on Thursday, snapping a seven-day winning streak, as renewed hostilities between the United States and Iran weighed on investor sentiment and clouded hopes of reopening the Strait of Hormuz.

The blue-chip FTSE 100 index fell 0.8% to 10,418.33 points by 1013 GMT.

The domestically focused FTSE 250 index also slipped 0.4%, easing from a near three-month high.

Investor sentiment weakened after Iran and the United States exchanged air strikes, underlining the fragile nature of negotiations aimed at stabilising the ceasefire that took effect in early April.

Markets had recently been supported by hopes that the Strait of Hormuz, a key route for global energy supplies, could eventually reopen.

Easing expectations for further domestic interest rate hikes had also helped drive gains in UK equities during the recent rally.

BT leads losses after stake increase report

Among individual stocks, telecoms group BT fell around 4.7%, making it the biggest decliner on the FTSE 100.

The losses followed a report stating that the British government would oppose any attempt by Indian billionaire Sunil Bharti Mittal to increase his stake in the company.

The decline in BT shares added pressure to the broader index, which was already under strain from the cautious market mood triggered by geopolitical developments.

Energy and defence stocks outperform

Despite the broader weakness in equities, energy and defence stocks posted gains.

The sectors emerged as the only major bright spots on the market after the renewed exchange of strikes between Iran and the United States increased concerns about global security and energy supply stability.

Investors continued to monitor developments surrounding the Strait of Hormuz, which remains a crucial gateway for global oil shipments.

PPHE Hotel surges on takeover proposal

In corporate developments, shares of PPHE Hotel Group surged 23% after the hospitality real estate company said it had received a £920.9 million ($1.24 billion) takeover proposal from Israel’s Fattal Hotel Group.

The sharp rise in PPHE shares contrasted with the broader market decline and marked one of the strongest performances on the London market during the session.

IQE falls after profit decline

Chipmaker IQE dropped 3.3% after reporting a decline in full-year adjusted core profit.

The company’s earnings update added to pressure on technology-linked stocks amid a weaker trading session for UK equities overall.

BP chair denies misconduct after dismissal

Meanwhile, ousted BP Chair Albert Manifold acknowledged that he may have pushed hard for change but again denied any misconduct following his dismissal from the role earlier this week.

BP shares were largely flat despite the comments, with investors showing limited reaction to the latest developments surrounding the company’s leadership changes.