11th Jun 2026 17:02
(Alliance News) - The FTSE 100 closed higher on Thursday, despite ongoing tensions in the Middle East and an interest rate hike in Europe.
The FTSE 100 closed up 49.07 points, 0.5%, at 10,303.88. The FTSE 250 ended up 19.30 points, 0.1%, at 22,970.64, while the AIM All-Share fell 1.42 points, 0.2%, to 770.96.
The Cboe UK 100 ended up 0.5% at 1,023.71, the Cboe UK 250 was 0.1% lower at 19,772.84, and the Cboe Small Companies Index rose 0.5% at 18,688.19.
"Despite continuing uncertainty about the fate of any peace deal in the Middle East, the FTSE 100 forged ahead on Thursday," said AJ Bell investment director Russ Mould.
The upward moves in equities came despite US President Donald Trump dialling up the rhetoric on the Middle East, vowing "very hard" strikes on Iran, and promising to take out the country's key oil infrastructure.
Trump threatened "bigger, more powerful" attacks as he pushes Tehran to turn their increasingly nominal ceasefire into a permanent peace deal.
But oil traders were unfazed by the latest flare up. Brent crude for August delivery traded flat at USD92.95 a barrel on Thursday, from USD92.98 at the time of the equities close in London on Wednesday.
In European equity markets on Thursday, the CAC 40 in Paris ended up 0.5%, and the DAX 40 in Frankfurt closed 0.1% higher as the European Central Bank raised interest rates by 25 basis points, as expected.
ECB President Christine Lagarde said the hike, its first in almost three years, was a "unanimous decision without reservations".
"The war in the Middle East is generating inflation pressures, and the decision to raise rates is robust across a range of scenarios mapping out how the shock might evolve and affect the medium-term outlook for the euro area," the ECB said.
Lagarde affirmed the rate decision was not an "insurance hike".
"It's a good monetary policy interest rate decision," Lagarde said. "I don't need to characterise it as credibility, insurance or anything else for that matter."
ING said the rate hike is "more of a symbolic move" to signal the ECB's "willingness and determination to avoid being too late" in carrying out its policy response.
"It's not a rate hike that will derail the eurozone economy, but a decision made with clear communication and reputation in mind; the risk of doing nothing and potentially falling behind the curve is larger than the risk of any adverse effects on growth from higher interest rates," ING analysts said.
The ECB's rate call comes ahead of a raft of monetary policy meetings next week, with interest rate decisions in the UK, US, Japan and Australia amongst others.
The euro traded lower against the greenback, at USD1.1522 on Thursday against USD1.1556 on Wednesday.
In London, tensions at the heart of government saw Defence Secretary John Healey quit his post, accusing Prime Minister Keir Starmer of failing to properly fund the Defence Investment Plan.
In a letter to Starmer, Healey said the PM had been "unable, and the Treasury has been unwilling, to commit the resources that the nation needs to defend the country at this time of rising threats".
The Dip, originally called for by the Strategic Defence Review almost exactly a year ago, has been long delayed by wrangling over funding.
Shares in defence manufacturers fell initially on the news before rallying. BAE Systems closed up 0.1% and Babcock International was 1.4% to the good.
The pound traded at USD1.3342 on Thursday afternoon, down from USD1.3397 on Wednesday. Against the euro, sterling eased to EUR1.1578 from EUR1.1593 on Wednesday.
Against the yen, the dollar was trading at JPY160.48, little changed from JPY160.46 a day earlier.
In New York, the Dow Jones Industrial Average was up 0.6%, the S&P 500 was 0.2% higher and the Nasdaq Composite rose 0.4%.
Oracle plunged 12% as margin pressures and increased capital investment plans offset strong financial fourth quarter results. But Intel gained 5.0% as Bank of America double-raised to 'buy.
The yield on the US 10-year Treasury eased to 4.52% on Thursday from 4.53% on Wednesday. The yield on the US 30-year Treasury was flat at 5.00%.
Gold continued its downward run, trading at USD4,079.75 an ounce on Thursday, lower from USD4,129.15 on Wednesday.
On the FTSE 100, Asia-focused financials rallied after recent weakness reflecting caution on regulatory reforms in China.
Standard Chartered rose 3.4%, Prudential 2.5% and HSBC 2.2%. On Prudential, UBS reiterated a 'buy' rating and said it believes a "potential downside scenario is already priced in".
But investors in Halma had a day to forget.
Shares plunged 15%, despite strong results, as guidance at its fast-growing photonics business fell short of more optimistic hopes.
In financial 2026, the Photonics business accounted for around eight percentage points of organic revenue growth, implying a growth rate of 52% in the financial year, improved from 37% the year before. For financial 2027, Halma expects growth in the Photonics business to slow to 30%.
JPMorgan said the financial 2027 Photonics guide is "likely a disappointment", slightly higher than sell-side expectations , but "likely lower than buy-side expectations in our view."
Analyst Chitrita Sinha said: "In our discussions, some investors were expecting another year of >50% growth in financial 2027 and as such, the 30% came in as a disappointment."
AJ Bell's Russ Mould thinks Halma is "paying the price for setting high standards" for itself.
"Despite delivering better-than-expected full-year results, investors didn't like conservative guidance for the new financial year," he noted.
Elsewhere, on AIM market, Concurrent Technologies was up 8.6% after it secured its largest single contract to data, worth around GBP17 million.
The Colchester, England-based designer and manufacturer of computer products for use in critical embedded applications said the four-year order from a "major European defence equipment prime contractor" eclipses by far last year's previous largest order of USD6.2 million.
The biggest risers on the FTSE 100 were Standard Chartered, up 61.00p at 1,852.00p, Airtel Africa, up 9.20p at 356.40p, Prudential, up 23.40p at 949.60p, Anglo American, up 92.00p at 3,804.00p and HSBC, up 28.40p at 1,321.80p.
The biggest fallers on the FTSE 100 were Halma, down 714.00p at 3,928.00p, Sage Group, down 44.60p at 805.60p, ICG, down 84.00p at 1,716.00p, Relx, down 86.00p at 2,462.00p and Autotrader, down 14.80p at 454.10p.
Friday's global economic calendar sees French and German CPI reports and UK GDP and industrial production data.
Friday's local corporate calendar has half year results from Jersey Electricity.
By Jeremy Cutler, Alliance News reporter
Comments and questions to [email protected]
Copyright 2026 Alliance News Ltd. All Rights Reserved.
Related Shares:
Concurrent TechnologiesHSBC HoldingsPrudentialStandard CharteredHalmaAirtel AfricaAnglo AmericanSage GroupIcg PlcAuto TraderRelx