London's FTSE 100 edged lower on Thursday, retreating 0.34% to 10,403.62, as declines in heavyweight energy stocks Shell, BP, and Centrica tempered earlier optimism from a U.S.-Iran peace deal rally. The index gave back some of Wednesday's 2.2% surge, which had been fueled by geopolitical headlines rather than corporate fundamentals.
Energy Sector Drags
Shell shares fell despite reporting a first-quarter adjusted profit of $6.92 billion, beating the $6.36 billion consensus. The company cut its share buyback program to $3 billion from $3.5 billion, disappointing investors. BP also traded lower as Brent crude slipped below $100 per barrel. Centrica, the parent of British Gas, warned that retail EBITDA would likely land at the lower end of its £500 million to £800 million target, citing mild weather, commodity price curves, and bad debt collection issues. The company also disclosed a £370 million acquisition of the Severn gas-fired power station.
Travel and Leisure Stocks Gain
In contrast, the FTSE 250 advanced 0.6%, supported by travel stocks benefiting from lower oil prices and hopes for a U.S.-Iran peace deal. International Consolidated Airlines Group and easyJet both rose as investors anticipated cheaper fuel and reduced geopolitical tensions. InterContinental Hotels Group climbed after reporting a 4.4% rise in first-quarter global revenue per available room, topping analyst expectations of 3.3%, driven by strength in Greater China.
Insurance and Retail Movers
Hiscox topped the FTSE 100 after posting a 10.2% increase in first-quarter insurance contract written premiums, fueled by momentum in its retail business. Peel Hunt analyst Andreas van Embden called it a "good start to the year," citing tight underwriting and tame claims. JD Sports also rose, though the retailer guided for 2026/27 pre-tax profit of £750 million to £850 million, below the £852 million reported for the prior year. JD flagged the Iran war as an added uncertainty, despite having no direct Middle East operations.
Market Outlook
European stocks were largely flat, with the STOXX 600 near unchanged at 623.56. The DAX in Germany was steady, while London's FTSE 100 slipped 0.2%. Investors are closely watching Tehran's response to the latest U.S. proposal. Swissquote's Ipek Ozkardeskaya warned that markets may be overreacting, shifting from optimism to "euphoria" on peace headlines, but noted she would "clap when Iran confirms." Analysts see the market testing whether lower energy prices can sustain gains for consumers and travel firms without hurting oil majors' profits.
