London close: FTSE gives up earlier gains amid earnings avalanche

(Sharecast News) - London stocks ended a touch lower on Thursday, giving back earlier gains despite hopes of a US-Iran deal to reopen the Strait of Hormuz, as oil crept higher again and as investors waded through a deluge of corporate releases.

The FTSE 100 closed down 0.2% at 10,867.89, while Brent crude was up 2.8% at $81.66 a barrel and West Texas Intermediate was 2.2% firmer at $76.87.

Market participants were mulling news that Iran's talks with Oman are progressing and that an agreement has been reached on a shipping route, although safe passage and a broader deal remain uncertain.

Patrick Munnelly at Tickmill Group said: "London's FTSE 100 initially advanced on Thursday and looked set for a third straight session of gains, but optimism faded into the close as investors digested a heavy slate of corporate earnings. The benchmark finished broadly flat after earlier strength, with sharp rallies in WPP, Diageo, Serco and Persimmon offset by weakness in travel, property, data, investment trusts and selected cyclicals.

"The early tone was constructive. Investors remained encouraged by optimism around US-Iran talks and the possible reopening of the Strait of Hormuz, a development that would reduce the risk of a prolonged disruption to global energy flows. That theme has been central to market sentiment this week, helping global equities and supporting risk appetite, even as it creates mixed implications for UK sectors.

"A reopening of Hormuz would be positive for inflation expectations, transport costs and household energy pressure. It would also support the Bank of England's view that domestic disinflation can offset external energy shocks, allowing Bank Rate to remain on hold at 3.75%. But it can also reduce the geopolitical premium in energy and commodity names, making sector leadership more unstable. Thursday's flat close reflected that mixed backdrop."

On home shores, a survey showed the downturn in the construction sector eased in July.

The S&P Global construction purchasing managers' index rose to a four-month high of 44.7 from 38.4 in June. It remained above the 50.0 mark that separates contraction from expansion, however.

The survey found that total new business received by construction companies fell at the slowest pace for 10 months in July. Some firms noted a recent turnaround in tender opportunities, including for commercial development, residential projects and transport infrastructure work.

However, many survey respondents also noted that heightened geopolitical uncertainty and subdued domestic economic conditions continued to weigh on customer demand, S&P said.

Tim Moore, economics director at S&P Global Market Intelligence, said: "July data suggests that the performance of UK construction sector has started to stabilise after a sharp downturn throughout the second quarter of 2026. Business activity levels continued to decline in all three main categories, but in each case the rate of contraction was much slower than in June. This was supported by the weakest reduction in new business intakes since September 2025.

"Survey respondents commented on signs of a turnaround in client demand and a revival in new tender opportunities in some cases, despite subdued underlying market conditions. This contributed to more upbeat business activity expectations for the year ahead, with confidence levels the highest since February.

"A renewed improvement in supplier performance and softer input cost inflation were also positive developments in July. Construction companies widely commented on fuel surcharges and higher raw material prices due to the war in the Middle East, but the overall rate of cost inflation was the lowest for five months."

In equity markets, drinks giant Diageo fizzed to the top of the FTSE 100 as it outlined plans to save around $1bn over the next three years alongside its full-year results.

Insurer Admiral was also a high riser after results, while Persimmon rallied as the housebuilder said full-year completions were set to be at the upper end of guidance and reported a rise in first-half profit, although it also warned over inflationary pressures.

WPP rocketed to the top of the FTSE 250 as the advertising agency's interim profits beat analysts' expectations and the company said there had been a further sequential improvement in like-for-like growth in the second quarter.

Harworth shot up after Peel Group made a �583m takeover offer for the land and property firm, while Hikma and Serco advanced after results.

EasyJet flew higher after US investment firm Castlelake said it was abandoning its pursuit of the budget airline, clearing the path for a �5.7bn takeover by Apollo.

On the downside, OSB Group tumbled after the lender downgraded its margin and return on tangible equity guidance for the year.

TP Icap, Quilter and Wizz Air all fell after results, while Relx and St James's Place retreated as they traded without entitlement to the dividend.

Budget airline Wizz reported a big drop in firstquarter profits as a 39% surge in fuel costs due to the Iran war offset strong passenger and capacity growth.

Market Movers

FTSE 100 (UKX) 10,867.89 -0.19%

FTSE 250 (MCX) 24,695.42 0.25%

techMARK (TASX) 6,173.86 0.75%

FTSE 100 - Risers

Diageo (DGE) 1,732.50p 5.58%

Admiral Group (ADM) 3,900.00p 5.23%

Vodafone Group (VOD) 119.30p 4.28%

Metlen Energy & Metals (MTLN) 50.05p 3.37%

Persimmon (PSN) 1,155.50p 2.89%

Legal & General Group (LGEN) 312.00p 2.23%

BAE Systems (BA.) 2,200.00p 2.04%

Airtel Africa (AAF) 332.00p 1.53%

Computacenter (CCC) 4,884.00p 1.50%

IMI (IMI) 3,130.00p 1.49%

FTSE 100 - Fallers

Relx plc (REL) 2,603.00p -4.13%

IG Group Holdings (IGG) 1,312.00p -2.81%

Melrose Industries (MRO) 477.20p -2.79%

Rolls-Royce Holdings (RR.) 1,533.40p -2.36%

Compass Group 11 (CPG) 32.40p -2.11%

Lloyds Banking Group (LLOY) 114.70p -2.05%

Coca-Cola HBC AG (CDI) (CCH) 4,916.00p -1.97%

Antofagasta (ANTO) 3,974.00p -1.88%

Reckitt Benckiser Group (RKT) 5,248.00p -1.76%

3i Group (III) 2,871.00p -1.75%

FTSE 250 - Risers

WPP (WPP) 395.00p 28.62%

Harworth Group (HWG) 178.00p 23.96%

Ceres Power Holdings (CWR) 425.00p 10.68%

Hikma Pharmaceuticals (HIK) 1,699.00p 8.85%

Serco Group (SRP) 260.00p 7.17%

THG (THG) 33.54p 5.21%

Harbour Energy (HBR) 243.60p 4.91%

Vistry Group (VTY) 282.80p 3.74%

Hays (HAS) 62.35p 3.66%

Elementis (ELM) 186.60p 2.98%

FTSE 250 - Fallers

OSB Group (OSB) 507.00p -10.90%

TP Icap Group (TCAP) 317.80p -7.94%

Baltic Classifieds Group (BCG) 197.50p -6.31%

Tritax Big Box Reit (BBOX) 164.50p -4.19%

Quilter (QLT) 196.00p -3.26%

Wizz Air Holdings (WIZZ) 1,110.00p -3.23%

Domino's Pizza Group (DOM) 205.60p -3.02%

Mony Group (MONY) 201.00p -2.80%

Derwent London (DLN) 2,054.00p -2.75%

Pacific Horizon Inv Trust (PHI) 1,090.00p -2.50%