12th Mar 2026 17:10
(Alliance News) - Stock prices in London closed lower on Thursday, after Iran's new leader called for the Strait of Hormuz to "remain closed", raising fears of a prolonged war in the Middle East.
The FTSE 100 index closed down 48.62 points, 0.5%, at 10,305.15. The FTSE 250 ended down 212.60 points, 1.0%, at 22,168.74, and the AIM all-share closed down 6.59 points, 0.9%, at 767.02.
The Cboe UK 100 was down 0.4% at 1,022.49, the Cboe UK 250 was 0.5% lower at 19,464.54, and the Cboe small companies was down 0.9% at 17,652.12.
In European equities on Thursday, the CAC 40 in Paris closed down 0.7%, while the DAX 40 in Frankfurt ended 0.2% lower.
The pound fell to USD1.3353 on Thursday afternoon from USD1.3410 at the equities close on Wednesday. The euro stood lower at USD1.1522 from USD1.1571. Against the yen, the dollar was trading higher at JPY159.21 compared to JPY158.81.
Stocks were under pressure and oil climbed on Thursday as Iran's new supreme leader ordered the vital Strait of Hormuz oil shipping lane to remain closed.
Meanwhile US President Donald Trump said stopping the Islamic republic's "evil empire" was more important than crude prices.
Brent oil was higher at USD98.65 a barrel on Thursday afternoon from USD91.93 late Wednesday.
"The lever of blocking the Strait of Hormuz must definitely be used," Ayatollah Mojtaba Khamenei said.
He added that "a limited amount of" Iran's revenge for US and Israeli strikes had "taken concrete form, but until it is fully achieved, this case will remain among our priorities."
Trump dismissed growing concerns, writing on social media that "of far greater interest and importance to me, as President, is stopping an evil Empire, Iran, from having Nuclear Weapons, and destroying the Middle East and, indeed, the World."
However, later on Thursday, deputy foreign minister Majid Takht-Ravanchi said Iran has allowed ships from some countries to cross the Strait of Hormuz.
"Some countries have already talked to us about passing the strait and we have cooperated with them," said Takht-Ravanchi during an interview with AFP in Tehran.
"As far as Iran is concerned we feel that those countries that joined the aggression should not benefit from safe passage through the Strait of Hormuz."
Stocks in New York were lower. The Dow Jones Industrial Average was down 1.1%, the S&P 500 index fell 1.1%, and the Nasdaq Composite was 1.3% lower.
The yield on the US 10-year Treasury widened to 4.25% on Thursday from 4.21% on Wednesday. The yield on the US 30-year Treasury stretched to 4.88% from 4.85%.
Analysts said the latest US initial unemployment benefit claims show that the labour market is relatively stable, despite fears of AI-related redundancies.
The Department of Labor said US initial jobless claims in the week ended March 7 amounted to 213,000, edging down by 1,000 from 214,000 the week prior. The prior week's level was upwardly revised from 213,000.
The latest reading was below the FXStreet cited consensus from 215,000.
"If AI were reshaping the workforce, we would expect a pickup in both hiring and layoffs, but so far neither appears to be happening on a scale large enough to be noticeable in the headline figures," Oxford Economics analyst Michael Pearce said.
Back in London, Rentokil Initial was the top blue-chip performer, as it closed up 5.2% after UBS raised the stock to 'buy' with a price target of 540 pence, up from 430p.
Several of the largest moves in the FTSE 100 were driven by stocks trading ex-dividend, meaning new buyers are no longer entitled to the next dividend payment.
Among those were HSBC, which closed down 6.1%, Entain, which fell 2.6%, and Schroders, which finished 2.7% lower.
M&G closed down 3.6% despite better-than-expected results, reflecting profit taking after a strong run and some disappointment at the lack of a share buyback.
JPMorgan analyst Farooq Hanif said: "This is a strong set of results from M&G."
"Assets under management and administration, net flows, adjusted operating profit and operating capital generation are all ahead of consensus," he added.
The London-based investment manager said adjusted operating pretax profit edged up to GBP838 million in 2025 from GBP837 million the year prior, ahead of GBP820 million company consensus.
On the FTSE 250 index, TP ICAP closed up 11% after reporting 2025 revenue of GBP2.35 billion, up 4.4% from GBP2.25 billion, and pretax profit of GBP230 million, up 7.5% from GBP214 million.
Revenue grew across all divisions except Energy & Commodities, where it fell 3%, as expected.
The firm also reduced net management and support costs despite inflation and higher UK national insurance.
Shawbrook closed down 12% despite reporting increased underlying profit.
The Essex, England-based digital banking platform reported interest income of GBP1.28 billion for 2025, up from GBP1.20 billion in 2024. Net interest income rose to GBP646.9 million from GBP590.9 million.
For 2026, Shawbrook reiterated its medium-term guidance. This includes eyeing a maiden ordinary dividend which would be payable in 2027, which it intends to "progressively build thereafter".
Among small caps, On the Beach finished down 13% after temporarily withdrawing its full-year profit guidance following a sharp slowdown in bookings to key Mediterranean destinations.
The company suspended its previous adjusted pretax profit guidance of GBP39 million to GBP43 million for the year to the end of September, citing weaker demand for trips to Turkey, Greece, Cyprus and Egypt.
Gold fell to USD5,131.30 an ounce on Thursday from USD5,172.30 at Wednesday's close.
The biggest risers on the FTSE 100 were Rentokil Initial, up 24.10p at 491.40p, Airtel Africa, up 11.00p at 348.60p, SSE, up 83.00p at 2,704.00p, BAE Systems, up 70.00p at 2,298.00p, and Centrica, up 6.20p at 206.80p.
The biggest fallers on the FTSE 100 were Persimmon, down 80.00p at 1,188.50p, HSBC, down 77.00p at 1,195.80p, Barclays, down 20.90p at 389.35p, Barratt Redrow, down 14.10p at 285.80p, and easyJet, down 16.80p at 380.80p.
Friday's economic events calendar has UK gross domestic product data at 0700 GMT. There is US GDP and the latest personal consumption expenditures reading at 1230, with French and Spanish consumer price index figures earlier in the day.
On Friday's UK corporate calendar is a trading statement from housebuilder Berkeley Group with full year results for Irish housebuilder Glenveagh Properties and radiator producer Stelrad.
By Michael Hennessey, Alliance News reporter
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