London open: Stocks fall amid Hormuz standoff

(Sharecast News) - London stocks fell in early trade on Thursday as oil prices ticked higher amid the ongoing standoff between the US and Iran over the Strait of Hormuz.

At 0835 BST, the FTSE 100 was down 0.6% at 10,418.09, while Brent crude was up 1.5% at $103.43 a barrel.

Sentiment was hit following a report the US military had intercepted at least three Iranian-flagged tankers in Asian waters. According to Reuters, citing shipping and security sources on Wednesday, the US was redirecting them away from their positions near India, Malaysia and Sri Lanka.

Meanwhile, Donald Trump told Fox News there was "no time frame" for ending the war in Iran. The US president said it was "not true" that he wanted to end the war before the US midterm elections in November. There is "no time pressure" on the ceasefire with Iran, he said.

"People say I want to get it over because of the midterms, not true," Trump told Fox News.

He told the New York Post that fresh talks with Iran could take place as soon as Friday.

Kathleen Brooks, research director at XTB, said: "The struggle between Iran and the US is now focusing on trade, and who controls the Strait of Hormuz. This suggests that oil prices will remain elevated, and it makes it hard for stock indices to sustain record highs. Before news broke about the US interception of tankers in Asian waters, the Nikkei and the South Korean Kospi both rose to record highs, following the US after the S&P 500 and the Nasdaq had done the same earlier on Wednesday.

"Markets have been trading on optimism that the US ceasefire would hold and that the Strait of Hormuz would reopen, as we move towards the end of the week, this optimism could be in short supply. The situation in the Strait of Hormuz is not sustainable, and if there is no improvement by the end of the week, volatility could spike once more."

On home shores, figures from the Office for National Statistics showed that public borrowing fell in the year to March, broadly in line with the fiscal watchdog's forecast.

Borrowing was �12.6bn last month, �1.4bn less than in March 2025 and the lowest March borrowing since 2022.

That meant that for the financial year ending March 2026, borrowing was estimated to have fallen by 13.1% at �132bn, narrowly below the Office for Budget Responsibility's forecast for �132.7bn.

Elsewhere, a survey showed that consumer confidence remained under pressure in April as war in the Middle East continued to weigh heavily.

According to the latest BRC-Opinium consumer sentiment data, expectations for the state of the economy over the next three months remained at -53, unchanged on March and the lowest on record.

Expectations for households' personal financial situation weakened, meanwhile, falling four points to -21.

Overall spending ticked up two points to 15, while personal saving was unchanged at -8.

Helen Dickinson, chief executive of the British Retail Consortium, said: "The Middle East conflict continues to stoke consumer anxiety around inflation and the cost of living. Amid a volatile geopolitical situation, households are expecting to see their pay packets squeezed by rising petrol, domestic energy and food prices.

"Expected retail spending rose, but this was driven entirely by grocery spend.

"The longer the volatility drags on, the more uncertainty it creates in the economy."

In equity markets, Legal & General, Fresnillo and Rightmove all lost ground as they traded without entitlement to the dividend.

Sainsbury's slumped as the supermarket retailer cautioned that full-year profits could fall this year as the outlook is uncertain due to the impact of the war on Iran. Tesco was also in the red.

For the year to 28 February 2026, it said retail underlying operating profit nudged down 1.1% to �1.0bn, in line with guidance. This reflects significant operating cost inflation and investment in value in a more competitive market.

For the current financial year, Sainsbury's expects to deliver total underlying operating profit of between �975m and �1.075bn as the duration and extent of impacts from the Middle East conflict are "very uncertain".

Travel outlet retailer WH Smith also fell sharply as it suspended its dividend and said it was taking a cautious view of future trade due to the war on Iran which had hit airline fuel supplies and passenger numbers.

The group now expects to deliver FY26 headline group profit before tax and non-underlying items of �90m to �105m. Half-year profits on the same basis fell to �3m from �21m with its UK operations hit by refurbishment of airport stores.

Man Group fell as it said first-quarter assets under management were broadly flat at $228.7bn after a single client pulled $6.1bn from one strategy.

On the upside, LSEG rallied as it said full-year revenue growth was expected to be in the upper half of the guidance range of 6.5% to 7.5%.

Domino's Pizza rose as it backed its earnings expectations for the year and hailed an encouraging first quarter.

Hikma gained as it reiterated full-year guidance despite a rise in costs following the outbreak of war in the Middle East.

Market Movers

FTSE 100 (UKX) 10,418.09 -0.56%

FTSE 250 (MCX) 22,786.61 -0.81%

techMARK (TASX) 5,885.17 -0.70%

FTSE 100 - Risers

Melrose Industries (MRO) 508.80p 1.52%

Reckitt Benckiser Group (RKT) 4,747.00p 1.26%

London Stock Exchange Group (LSEG) 9,862.00p 1.07%

Shell (SHEL) 3,325.50p 0.82%

BP (BP.) 576.80p 0.79%

Unilever (ULVR) 4,226.50p 0.76%

Imperial Brands (IMB) 2,769.00p 0.62%

Intertek Group (ITRK) 4,983.00p 0.44%

British American Tobacco (BATS) 4,156.00p 0.29%

Croda International (CRDA) 3,009.00p 0.27%

FTSE 100 - Fallers

Legal & General Group (LGEN) 252.70p -5.99%

Sainsbury (J) (SBRY) 334.50p -5.35%

Fresnillo (FRES) 3,470.00p -5.33%

Entain (ENT) 569.40p -4.40%

Experian (EXPN) 2,801.00p -2.69%

Rightmove (RMV) 441.00p -2.47%

BAE Systems (BA.) 2,063.50p -2.30%

Tesco (TSCO) 485.05p -2.20%

The Sage Group (SGE) 905.40p -2.19%

Flutter Entertainment (DI) (FLTR) 7,782.00p -2.08%

FTSE 250 - Risers

Dr. Martens (DOCS) 71.90p 4.96%

AO World (AO.) 96.90p 3.74%

Domino's Pizza Group (DOM) 190.20p 3.60%

Hikma Pharmaceuticals (HIK) 1,363.50p 2.87%

Ithaca Energy (ITH) 270.70p 2.50%

Genuit Group (GEN) 304.80p 2.14%

Barr (A.G.) (BAG) 658.00p 1.70%

Ashoka India Equity Investment Trust (AIE) 244.50p 1.66%

Workspace Group (WKP) 336.00p 1.65%

C&C Group (CDI) (CCR) 125.40p 1.46%

FTSE 250 - Fallers

WH Smith (SMWH) 539.00p -15.27%

Man Group (EMG) 249.20p -5.36%

Baltic Classifieds Group (BCG) 198.40p -4.70%

Wickes Group (WIX) 210.00p -4.11%

Derwent London (DLN) 1,717.00p -3.86%

Grafton Group Ut (CDI) (GFTU) 908.70p -3.83%

Twentyfour Income Fund Limited Ord Red (TFIF) 107.00p -3.60%

SSP Group (SSPG) 176.50p -3.15%

Paragon Banking Group (PAG) 791.50p -3.01%

Pan African Resources (PAF) 149.22p -2.75%