London midday: FTSE extends losses as oil prices climb; Next bucks trend

(Sharecast News) - London stocks had fallen further by midday on Thursday as oil prices climbed amid conflicting messages about the status of the war in the Middle East.

The FTSE 100 was down 1.3% at 10,036.90. Brent was up 4.5% at $106.77 a barrel and West Texas Intermediate was 3.9% higher at $93.86.

The US has said it was "very close" to meeting its objectives in the war with Iran and that talks about a peace plan have taken place. However, Iranian Foreign Minister Abbas Araghchi reportedly told state media on Wednesday that Iran has no intention of negotiating with the US.

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

Dan Coatsworth, head of markets at AJ Bell, said: "Investors have eagerly awaited a ceasefire in the Middle East this week but once again there are mixed messages from the US and Iran, leaving markets confused. Momentum has been lost across the main European stock indices and oil has edged higher, meaning it's still a waiting game."

Joshua Mahony, chief market analyst at Scope Markets, said traders are waking up to the high likeliness that Trump's five-day extension passes without an agreement.

"The tone taken by Iran may simply be posturing, but their desire to teach the West a message means that there is a high likeliness they continue this conflict until energy prices reach uncomfortable levels," he said. "For equities, the negative relationship between inflation expectations and stock market sentiment means that the rise in crude seen today has dampened sentiment in European markets."

He added: "With the deadline fast approaching for Trump's energy infrastructure strikes, fears are growing around a potential escalation over the course of the weekend."

Investors were also mulling the latest Global Economic Outlook from the Organisation for Economic Development and Cooperation. The OECD said that of the major G20 economics, the UK is facing the biggest hit to growth from the Iran war. It downgraded its UK growth forecast for this year to 0.7%, from 1.2%.

Elsewhere, the British Retail Consortium's latest consumer confidence indicator dropped to its lowest level in March in at least two years as the escalating conflict in the Middle East hammered sentiment about the macroeconomic outlook.

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.

That resulted in a net balance - those expecting an increase minus those expecting a decrease - of -53% in March, down from -30% in February and the lowest level since the BRC started collecting sentiment data in March 2024.

Helen Dickinson, chief executive of the BRC, said that the prospect of higher inflation as a result of the war has hammered confidence.

"As stock markets tumbled, confidence in both the economy and personal finances dropped to their lowest levels on record. The drop in confidence was most pronounced among the Boomer generation, who are most reliant on investment and pension funds. Meanwhile, spending expectations rose as shoppers expected to see rising energy costs reflected across the economy," Dickinson said.

"Just as the economy was beginning to turn a corner on inflation, the rise in global energy prices is particularly unwelcome for businesses and families. It is now vitally important that Government policy does not exacerbate the situation, and bringing down the cost of living must be a top priority."

Separately, a survey from the Confederation of British Industry showed that private sector activity is once again expected to fall in the three months to June, with businesses also increasingly concerned about conflict in the Middle East.

In equity markets, 3i Group was the worst performer on the FTSE 100 after it gave an update on the performance of its largest portfolio holding, Dutch discount retailer Action.

Heavily-weighted miners were under the cosh as copper prices fell, with Anglo American and Antofagasta among the biggest losers, along with precious metals miner Fresnillo. Gold and silver prices were also weaker.

Currys tumbled after it announced that chief executive officer Alex Baldock is stepping down after eight years in the job to take a new external position.

Playtech slid as it reported a 10% drop in full-year revenue from continuing operations and a 9% decline in adjusted earnings before interest, tax, depreciation and appreciation. The performance was as it expected, however, reflecting the impact of the sale of Snaitech and the revised agreement with Caliente Interactive.

Aviva, Segro, St James's Place, Prudential and Mony Group all lost ground as they traded without entitlement to the dividend.

On the upside, high street stalwart Next surged 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.

Looking to the current year, Next maintained its guidance for full-price sales growth of 4.5% but nudged its profit outlook upwards. It now expects annual pre-tax profits of �1.21m, around �8m more than guidance provided in January.

Oil giants Shell and BP gushed higher amid firmer oil prices, while THG surged after saying it swung to a profit in 2025 as disposals and a strong second half helped drive a turnaround across the group.

Ceres Power also rallied after results, along with Pollen Street.

Market Movers

FTSE 100 (UKX) 9,977.40 -1.28%

FTSE 250 (MCX) 21,222.22 -1.18%

techMARK (TASX) 5,581.04 -1.01%

FTSE 100 - Risers

Next (NXT) 12,665.00p 5.23%

BP (BP.) 573.10p 1.11%

Burberry Group (BRBY) 1,049.50p 1.06%

Shell (SHEL) 3,457.50p 0.77%

Melrose Industries (MRO) 495.20p 0.65%

JD Sports Fashion (JD.) 69.02p 0.50%

Sainsbury (J) (SBRY) 332.80p 0.42%

Haleon (HLN) 363.00p 0.41%

GSK (GSK) 2,060.00p 0.39%

BT Group (BT.A) 206.60p 0.39%

FTSE 100 - Fallers

3i Group (III) 2,552.00p -8.81%

Anglo American (AAL) 2,994.00p -5.67%

Aviva (AV.) 591.60p -5.19%

SEGRO (SGRO) 648.40p -4.82%

Antofagasta (ANTO) 3,304.00p -4.81%

Fresnillo (FRES) 3,168.00p -4.40%

Lion Finance Group (BGEO) 9,315.00p -3.87%

Rolls-Royce Holdings (RR.) 1,151.50p -3.60%

St James's Place (STJ) 1,180.50p -3.47%

Pershing Square Holdings Ltd NPV (PSH) 3,994.00p -3.34%

FTSE 250 - Risers

Ceres Power Holdings (CWR) 347.80p 13.99%

Pollen Street Group Limited (POLN) 800.00p 8.11%

THG (THG) 33.72p 7.12%

Diversified Energy Company (DI) (DEC) 1,300.00p 3.50%

Hill and Smith (HILS) 2,160.00p 2.37%

Harbour Energy (HBR) 300.20p 2.18%

International Public Partnerships Ltd. (INPP) 128.60p 1.74%

Hays (HAS) 33.08p 1.10%

Chemring Group (CHG) 504.00p 1.00%

Greencoat UK Wind (UKW) 99.10p 0.92%

FTSE 250 - Fallers

Currys (CURY) 121.40p -7.81%

Playtech (PTEC) 325.00p -7.54%

Mony Group (MONY) 145.20p -6.99%

Paragon Banking Group (PAG) 724.00p -6.21%

Hochschild Mining (HOC) 560.00p -5.64%

OSB Group (OSB) 519.00p -5.55%

Pan African Resources (PAF) 128.00p -5.04%

Oxford Biomedica (OXB) 577.00p -4.79%

Raspberry PI Holdings (RPI) 301.80p -4.23%

BlackRock World Mining Trust (BRWM) 843.00p -4.20%