London close: FTSE nudges up as utilities rally

(Sharecast News) - London stocks ended a mostly negative session a touch higher on Thursday despite a rise in oil prices, with utilities lending a hand, as investors continued to mull developments in the Middle East.

The FTSE 100 closed up 0.1% at 10,443.47, while Brent crude was 1.7% higher at $106.77 a barrel, resuming its march upwards following a Reuters report that Iran's Supreme Leader Mojtaba Khamenei has issued a directive that the country's near-weapons-grade uranium should not be sent abroad.

Chris Beauchamp, chief market analyst at IG, said: "Now that Nvidia results are out of the way, it is back to focusing on Iran for global markets, and today has illustrated the uncertainty of the situation perfectly. Stocks had been steady and oil prices had dropped, but then headlines suggested the Iranian supreme leader would not allow enriched uranium to leave Iran. Hopes of progress were shattered, at least it seemed that way.

"But later the headline was denied, leaving investors none the wiser. Weeks of this lie ahead, potentially months, but Hormuz remains closed, a ticking timebomb underneath the global economy."

On home shores, a survey showed that business activity fell in May for the first time since April 2025 as political uncertainty at home added to the impact of the war in the Middle East.

The flash S&P Global composite output index fell to a 13-month low of 48.5 from 52.6 in April and versus expectations of 51.6. The A reading above 50.0 indicates expansion, while a reading below signals contraction.

The flash services PMI business activity index declined to a 64-month low of 47.9 in May from 52.7 the month before, while the manufacturing output index printed at 52.4, up from 51.8 in April and hitting a three-month high.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "The UK economy is facing a perfect storm, as rising political uncertainty adds to the growing impact from the war in the Middle East. Businesses are reporting falling output, surging inflation, supply shortages and job cuts in May.

"The May PMI data indicate that the economy contracted at a 0.2% quarterly rate, representing a marked contrast to the robust growth seen earlier in the year. The blame lies first and foremost with the war in the Middle East, though companies are also noting that domestic politics are taking an increasing toll, driving uncertainty higher, in turn deterring spending, hiring and investment."

Meanwhile, the latest survey from the Confederation of British Industry showed that manufacturing orders shrank in May at the fastest rate since September 2020. The CBI's monthly balance of total new orders declined to -41 from -38 in April.

CBI senior economist Cameron Martin said manufacturers remain under significant pressure, with a growing share of firms expecting to raise prices over the summer, pointing to mounting cost pressures across the sector.

"Against an increasingly uncertain global backdrop, the conflict in the Middle East is feeding through to higher energy costs and renewed supply chain disruption, adding another layer of challenges for manufacturers, who are already grappling with weak demand," he said.

In equity markets, defensive stocks were doing the heavy lifting, with utilities SSE, Centrica and National Grid among the top gainers on the FTSE 100.

ICG rallied as it said full-year fee-earning assets under management rose 11% to $87bn, with fundraising exceeding its expectations at $17bn.

AJ Bell shot higher as the investment platform lifted its full-year outlook, hailing an "excellent" first-half performance with record customer growth.

Qinetiq surged after it reported a record full-year order intake, hiked its dividend by 24% and announced a £200m share buyback extension.

On the downside, Autotrader slid after results. Derren Nathan, head of equity research at Hargeaves Lansdown, said: "Half year results were decent enough but news that revenue and car price growth had flattened in April, and full-year guidance below market forecasts sparked a sell-off."

Convatec tumbled despite saying it had enjoyed a good start to the year and that it was on track to deliver its guidance for 2026.

BT Group was weaker after it reported flat adjusted earnings as strong demand for its fibre broadband offset lower service revenue.

Mitchells & Butlers slumped as it reported a slowdown in second-quarter sales as consumers reined in spending.

Whitbread and Imperial Brands were on the back foot as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 10,443.47 0.11%

FTSE 250 (MCX) 22,947.92 0.48%

techMARK (TASX) 6,010.04 1.18%

FTSE 100 - Risers

3i Group (III) 2,250.00p 3.26%

SSE (SSE) 2,409.00p 3.08%

ICG (ICG) 1,886.00p 2.89%

Babcock International Group (BAB) 1,066.50p 2.60%

Centrica (CNA) 198.95p 2.16%

National Grid (NG.) 1,279.00p 1.91%

Antofagasta (ANTO) 3,894.00p 1.88%

Kingfisher (KGF) 293.40p 1.87%

IG Group Holdings (IGG) 1,837.00p 1.77%

Rio Tinto (RIO) 7,768.00p 1.68%

FTSE 100 - Fallers

Autotrader Group (AUTO) 452.60p -8.81%

Convatec Group (CTEC) 203.60p -4.95%

BT Group (BT.A) 219.50p -4.94%

Airtel Africa (AAF) 325.20p -2.69%

Whitbread (WTB) 2,367.00p -2.43%

Weir Group (WEIR) 2,478.00p -2.21%

InterContinental Hotels Group (IHG) 151.95p -2.06%

Rightmove (RMV) 410.80p -2.03%

Imperial Brands (IMB) 2,824.00p -1.94%

Melrose Industries (MRO) 496.50p -1.92%

FTSE 250 - Risers

AJ Bell (AJB) 612.00p 14.61%

Ceres Power Holdings (CWR) 665.00p 11.67%

QinetiQ Group (QQ.) 465.60p 7.88%

XP Power Ltd. (DI) (XPP) 1,900.00p 7.34%

Raspberry PI Holdings (RPI) 673.00p 6.66%

Chemring Group (CHG) 511.50p 5.07%

Investec (INVP) 641.00p 4.82%

Oxford Biomedica (OXB) 620.00p 4.73%

Oxford Nanopore Technologies (ONT) 127.20p 4.52%

AEP Plantations (AEP) 1,828.00p 4.10%

FTSE 250 - Fallers

Mitchells & Butlers (MAB) 235.00p -6.93%

Ithaca Energy (ITH) 256.20p -6.70%

Bytes Technology Group (BYIT) 345.80p -3.94%

Playtech (PTEC) 351.00p -3.84%

RS Group (RS1) 667.50p -3.26%

Rank Group (RNK) 96.20p -2.93%

Energean (ENOG) 860.00p -2.82%

Tate & Lyle (TATE) 508.00p -2.68%

Close Brothers Group (CBG) 448.20p -2.57%

International Workplace Group (IWG) 187.20p -2.50%