FTSE 100 Today: UK Stocks Slip 0.37% as Iran Tensions Overshadow Stronger-Than-Expected GDP Growth
Key Points
FTSE 100 fell 0.37% Thursday, extending Wednesday's 0.1% decline despite stronger UK economic data.
UK GDP grew 0.7% in the three months to May, beating forecasts of 0.5% growth.
Annual UK growth accelerated to 1.3%, the fastest pace recorded in 13 months.
Iran warned of a crushing response if the US strikes its power plants and infrastructure.
The FTSE 100 fell 0.37% Thursday morning, extending Wednesday’s modest decline. That drop came despite UK GDP data beating expectations by a wide margin. The economy grew 0.7% in the three months to May, well above forecasts of 0.5%. Annual growth accelerated to 1.3%, its fastest pace in 13 months.
Fresh Iran threats overshadowed that positive economic news across London trading. Iran warned it would “crush” regional infrastructure if the US struck its power plants. Germany’s DAX fell 0.22%, while France’s CAC 40 dropped 0.21% Thursday. Sterling held steady near $1.3535 against the US dollar.
FTSE 100’s Thursday Session in Detail
The FTSE 100 (^FTSE) traded down 0.37% as of 07:25 GMT Thursday morning. That extended losses from Wednesday’s close of 10,515.92, itself down 0.1%. The index has now posted back-to-back declines despite strong domestic economic data. Geopolitical risk continues outweighing fundamentals in Thursday’s early trading.
FTSE 100’s key levels through Thursday’s session:
- The index fell 0.37% by 07:25 GMT, extending Wednesday’s decline.
- Wednesday’s close came in at 10,515.92, down 0.1% for the day.
- Futures had pointed to a 31.5-point drop before the cash open.
- Germany’s DAX and France’s CAC 40 both posted smaller declines Thursday.
UK GDP Data Beat Expectations Sharply
UK GDP grew 0.7% in the three months to May, the ONS reported. That comfortably beat economist forecasts of 0.5% growth for the period. Annual growth accelerated to 1.3%, the fastest pace in 13 months. Monthly GDP rose 0.1% in May, recovering from April’s 0.1% decline.
What Drove May’s Growth Acceleration
Services activity rose 0.3% in May, driving most of the monthly improvement. That recovery followed a weaker April reading that had worried economists. Trade and industrial production data were also due alongside Thursday’s GDP release. The goods trade deficit was forecast at £23.6 billion for the same month.
Additional UK economic indicators released Thursday:
- Industrial output was expected to slip 0.1% month-on-month in May.
- The Bank of England will weigh this data ahead of its next rate decision.
- Stronger growth reduces the near-term case for preemptive interest rate cuts.
- Fed Governor Lisa Cook signaled openness to tighter US policy if inflation persists.
Iran’s Fresh Threats Rattled Markets Overnight
Iran’s military warned that US infrastructure attacks would trigger a crushing response. That statement followed President Trump’s Wednesday threat to “knock out” Iranian power plants. US Central Command had already launched fresh strikes targeting Hormuz-related military capabilities. The exchange kept oil-sensitive and risk assets under pressure into Thursday’s session.
Oil-Linked Stocks Reacted to the Escalation
Rising Middle East tensions continued pushing global oil prices higher this week. TotalEnergies said the resulting price gains should boost its second-quarter profits. Energy stocks across the FTSE 100 have benefited unevenly from this dynamic. Airlines and other fuel-sensitive sectors face the opposite pressure from costlier oil.
Stocks Moving on Company-Specific News Thursday
Several FTSE 100 and FTSE 250 names moved on individual updates Thursday morning. TotalEnergies said higher Middle East-driven oil and gas prices should boost Q2 profits. Premier Foods reported a 4% rise in first-quarter branded sales. Frasers Group withheld its fiscal 2027 outlook, citing ongoing takeover-bid uncertainty.
Individual stock updates shaping Thursday’s session:
- Crest Nicholson now expects FY2026 profit at the lower end of guidance.
- Ocado is pursuing new US retail partnerships despite weaker first-half earnings.
- SSE maintained its earnings guidance after higher network and renewable investment.
- SSE also appointed former National Grid CEO John Pettigrew to its board.
Currency and Bond Markets Stayed Cautious
Sterling traded nearly flat at $1.3535 against the US dollar Thursday. The pound rose slightly to $1.3537 overnight as markets awaited Thursday’s GDP data. The Federal Reserve’s Beige Book showed modest US economic expansion through late May. Prices continued rising moderately across the US economy, the report noted.
Final Thoughts
The FTSE 100’s 0.37% decline shows geopolitical risk still dominates UK market sentiment. Thursday’s stronger GDP print offers genuine reassurance about underlying economic momentum. Iran’s escalating rhetoric and fresh US strikes continue overshadowing that positive domestic data. Individual stock stories, from TotalEnergies to Frasers Group, added further texture to trading. Markets will likely stay reactive to Middle East headlines through the rest of this week.
Disclaimer:
The content shared by Meyka AI PTY LTD is for research and informational purposes only. Meyka is not a financial advisory service, and the information provided should not be treated as investment or trading advice.
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