London close: Stocks slump, oil climbs amid erratic peace talks

(Sharecast News) - Global equity markets experienced another day of volatility on Thursday, with stocks across Europe and the US dropping sharply and oil prices climbing in response to ongoing erratic peace talks in the Middle East.

London's FTSE 100 finished the day down 1.3% at 9,972.17 after rising 2.2% over the past two sessions.

While the US said it was "very close" to meeting its objectives in the war with Iran and that talks about a peace plan had taken place, Iran's foreign ministry told state media that Tehran had no intention of negotiating with Washington.

Iran also reportedly said that it would reject a US ceasefire offer and instead counter it with its own five-point list that would give it control of the vital Strait of Hormuz and war compensation.

US President Donald Trump insisted Iran was still interested in a peace deal, but warned the country to "get serious soon" about negotiations. "They better get serious soon, before it is too late, because once that happens, there is NO TURNING BACK, and it won't be pretty!," he posted on social media.

Brent crude was up 4.7% at $101.84 a barrel by the close in London, while WTI crude was 4.9% higher at $94.76 a barrel.

"Investors look like they're fed up with the hot and cold messages around Iran peace talks," said Dan Coatsworth, head of markets at AJ Bell. "The fact the Vix fear index jumped 6% and oil prices rose by 5% would suggest recent market optimism about a resolution in the Middle East is fading fast."

Concerns about the broader economic fallout from the war have weighed on investor sentiment this week, dampened further by the OECD on Thursday which trimmed growth forecasts for the UK in the wake of the war owing to heightened inflation risks.

The Paris-based body now expects British GDP to grow by 0.7% in 2026, down on previous estimates for a 1.2% improvement, though guidance was left unchanged for 2027 at 1.3%. Inflation - which currently stands at 3% - was forecast to accelerate to 4% this year, before dropping back to 2.6% in 2027.

Meanwhile, the British Retail Consortium's latest consumer confidence indicator for March dropped to its lowest level in at least two years. Some 64% of consumers said they expected the state of the UK economy to get worse over the next three months, while just 11% predicted an improvement, the BRC said.

Next surges on results; 3i slumps

FTSE 100-listed high street stalwart Next rose 4% as it posted above-forecast earnings following an "exceptional" year and lifted its profit outlook. The retailer saw total group sales jump 10.8% in the 52 weeks to January end, to �7bn, while pre-tax profits were 14.5% stronger at �1.16bn, ahead of analyst expectations for �1.15bn.

BP and Shell were also in the black as oil prices firmed.

On the downside, 3i Group slumped 17% after it gave an update on the performance of its largest portfolio holding, Dutch discount retailer Action. Investors were seemingly underwhelmed with net sales growth of 16% in 2025, while EBITDA rose 14%.

Precious metals miner Fresnillo lost its shine as gold and silver prices retreated, while Aviva, Segro and St James's Place all fell as they traded without entitlement to the dividend.

On the FTSE 250, Ceres Power rallied 10% despite posting a slide in annual revenues and widened losses, amid a slowdown in hydrogen adoption. The clean energy specialist saw total revenues tumble to �32.6m in the year to December end, from �51.9m.