Source: Sharecast
At 0840 BST, the FTSE 100 was down 0.4% at 10,397.72, while Brent crude was 2.7% weaker at $98.55 a barrel.
Sentiment got a boost on Wednesday, with stocks markets surging and oil prices plunging following reports the US and Iran were close to agreeing on a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations.
Trump’s tone soured somewhat since then, however, with the US president saying that a deal with Tehran was a "big assumption" and that if it does not agree, US bombing will resume "at a much higher level and intensity than it was before".
Susannah Streeter, chief investment strategist at Wealth Club, said: "The wild streak of enthusiasm which hit markets amid hopes for a major de-escalation in the Iran conflict is tempering today.
"There’s a realisation that there are more hurdles to climb for a longer-term resolution to be agreed, even though Iran is reported to be studying a US peace proposal aimed at formally ending the conflict. President Trump is still threatening to resume strikes if a deal isn’t struck, so there’s more caution around."
On home shores, meanwhile, local elections were in focus. Matt Britzman, senior equity analyst at Hargreaves Lansdown, said "expectations of a bruising result for Labour look firmly baked in".
"A poor showing would pile more pressure on Starmer, leaving investors to weigh whether political pressure starts to translate into a different fiscal direction for the UK," he added.
In equity markets, British Gas owner Centrica slumped as it cautioned that full-year retail EBITDA was expected to be towards the lower end of its guidance range of £500m to £800m. It also announced the acquisition of the Severn Combined-Cycle Gas Turbine power station from the Calon Energy Group for about £370m.
Flutter Entertainment and Coca-Cola HBC also lost ground after results, while oil major Shell gushed lower despite posting an above-forecast surge in profits fuelled by soaring energy prices in the wake of the US-Iran war.
First-quarter adjusted earnings came in at $6.92bn, up from $3.26bn in the fourth quarter and $5.58bn a year previously. Analysts had been expecting earnings closer to $6.36bn. The blue chip also upped the divided by 5% and announced a $3bn share buyback programme.
Relx and Admiral were in the red as they traded without entitlement to the dividend.
On the upside, Hiscox shot higher as the insurer posted a 10.2% jump in first-quarter contract written premiums, pointing to accelerating momentum in the retail segment.
InterContinental Hotels rose as it reported better-than-expected first-quarter revenue per available room and backed its expectations for the full year. Global RevPAR grew 4.4%, ahead of expectations for a 3.3% increase. Premier Inn owner Whitbread also gained.
JD Sports Fashion was in the black despite saying it expects muted market growth in the near term due to a weaker spending outlook for consumers and product cycle changes at its major footwear partners. The company widened full-year earnings guidance to £750m - £850m after reporting profit before tax and adjusting items of £852m for fiscal 2025/26, down 7.7% year on year.
Lion Finance and Helios Towers gained after first-quarter results, while Harbour Energy advanced after a trading statement.
Market Movers
FTSE 100 (UKX) 10,397.72 -0.39%
FTSE 250 (MCX) 22,974.38 0.62%
techMARK (TASX) 5,948.35 -0.18%
FTSE 100 - Risers
Hiscox Limited (DI) (HSX) 1,632.00p 5.48%
InterContinental Hotels Group (IHG) 151.30p 3.26%
Lion Finance Group (BGEO) 11,460.00p 2.86%
Antofagasta (ANTO) 3,915.00p 2.82%
Rolls-Royce Holdings (RR.) 1,311.40p 2.75%
International Consolidated Airlines Group SA (CDI) (IAG) 400.90p 2.74%
Fresnillo (FRES) 3,539.00p 2.43%
Burberry Group (BRBY) 1,237.40p 1.91%
Prudential (PRU) 1,202.00p 1.65%
Spirax Group (SPX) 7,700.00p 1.37%
FTSE 100 - Fallers
Relx plc (REL) 2,449.00p -5.90%
Flutter Entertainment (DI) (FLTR) 7,282.00p -4.80%
Centrica (CNA) 201.20p -4.06%
Admiral Group (ADM) 3,204.00p -3.95%
Coca-Cola HBC AG (CDI) (CCH) 4,305.00p -2.78%
Shell (SHEL) 3,120.00p -2.77%
BP (BP.) 536.10p -2.52%
BAE Systems (BA.) 2,045.00p -2.15%
Severn Trent (SVT) 3,147.00p -1.96%
SSE (SSE) 2,479.00p -1.93%
FTSE 250 - Risers
Helios Towers (HTWS) 233.60p 14.96%
Elementis (ELM) 153.20p 4.64%
FirstGroup (FGP) 170.00p 4.62%
Johnson Service Group (JSG) 136.35p 4.04%
Ceres Power Holdings (CWR) 750.00p 3.93%
Pan African Resources (PAF) 153.52p 3.31%
TBC Bank Group (TBCG) 4,662.00p 3.24%
Wizz Air Holdings (WIZZ) 997.00p 3.04%
Dr. Martens (DOCS) 64.90p 3.02%
Raspberry PI Holdings (RPI) 720.00p 2.86%
FTSE 250 - Fallers
Ninety One (N91) 223.20p -4.59%
Trainline (TRN) 227.80p -3.38%
Barr (A.G.) (BAG) 615.00p -3.00%
Greggs (GRG) 1,476.50p -2.35%
Clarkson (CKN) 4,864.00p -1.98%
Supermarket Income Reit (SUPR) 82.95p -1.95%
Ithaca Energy (ITH) 246.50p -1.86%
Inchcape (INCH) 824.00p -1.81%
Diversified Energy Company (DI) (DEC) 1,106.00p -1.23%
Pennon Group (PNN) 523.00p -1.13%