London's FTSE 100 edged lower on Thursday as escalating tensions between the U.S. and Iran dampened risk appetite, while weakness in technology stocks added to the pressure on the index. The blue-chip FTSE 100 index (.FTSE), opens new tab fell 0.2% to 10,492.99 points by 1038 GMT.
Iran said that the Strait of Hormuz was an inviolable "red line", warning that if U.S. President Donald Trump carried out his threat to attack Iran's infrastructure, it would strike all infrastructure across the Gulf region. Technology stocks (.FTUB1010), opens new tab led losses, with data and technology firm Experian (EXPN.L), opens new tab falling 2.3% after reporting in-line first-quarter results and maintaining its annual outlook, while peer Relx (REL.L), opens new tab was down 1%. While the FTSE 100 remained under pressure, the midcap FTSE 250 (.FTMC), opens new tab rose 0.3%, helped by a 66.8% jump in Rotork (ROR.L), opens new tab after Swiss engineering group ABB (ABBN.S), opens new tab announced a $5.5 billion takeover of the British automation company.
Meanwhile, Britain's economy eked out minimal growth in May as the services industry expanded but other sectors shrank, suggesting fragile confidence among businesses against the backdrop of the Iran war and a change of prime minister at home. "The UK might have delivered the fastest growth in the G7 at the start of the year, but it's a low bar. And the UK's high levels of debt make it particularly vulnerable to further inflation shocks which may result from continued conflict in the Middle East," said Danni Hewson, head of financial analysis at AJ Bell.
Among other stocks, Ocado (OCDO.L), opens new tab tumbled 18.8% to a 13-year low after the British online grocery and technology group failed to show tangible progress in talks to secure new U.S. partners to boost its business to effectively compete with rapid delivery firms.
