The FTSE 100 edged lower in early trading on Thursday, giving back some of the previous session's gains as investors digested a mixed batch of corporate results and renewed concerns over rising oil prices. The blue-chip index slipped 0.34% to 10,396.72 by 08:15 BST, following a 1% rally on Wednesday.
The pullback underscores the fragile sentiment in London, where the market is struggling to hold gains amid a backdrop of elevated bond yields, crude oil above $100 per barrel, and uneven company earnings. FTSE futures had pointed to a softer open even as Asian shares rallied on the back of Nvidia's results and a strike suspension at Samsung that lifted chip stocks.
BT's Flat Earnings Disappoint
BT Group was among the main corporate names in focus. The UK's largest broadband and mobile operator reported flat core earnings of £8.2 billion for the year ended March, as strong demand for fibre broadband offset a 3% decline in revenue to £19.7 billion. The company added 2.2 million fibre connections during the period, but its Openreach network lost 825,000 lines as customers switched to alternative providers. BT expects a further 800,000 line losses this year.
Chief Executive Allison Kirkby emphasized the company's role in building the UK's digital infrastructure, but the market remained cautious about ongoing competitive pressures and the impact of line losses on future revenue.
Sage Lifts Outlook as Revenue Rises
In contrast, software firm Sage Group provided a cleaner growth story. The company reported first-half underlying revenue growth of 11% to £1.36 billion, with operating profit rising 15% to £326 million. Sage raised its full-year revenue outlook, now expecting organic total revenue growth above 9% for fiscal 2026.
CEO Steve Hare highlighted the role of Sage's "intelligent agents" in helping finance teams close books faster and improve planning, underscoring the company's focus on AI-driven productivity gains.
easyJet Warns on Fuel and Bookings
The travel sector faced headwinds as easyJet reported a first-half loss of £552 million and cautioned that its full-year outlook remained uncertain. The airline cited higher fuel costs due to the Iran conflict and weaker summer booking patterns. Second-half bookings were 58% sold, down from 77% a year earlier.
CEO Kenton Jarvis expressed confidence in the airline's ability to bounce back from Middle East-related setbacks, but the warning added to concerns about the impact of elevated oil prices on consumer-facing stocks.
Oil and Bond Yields Pressure Equities
Brent crude traded around $106.57 per barrel, keeping energy costs elevated and adding to inflationary pressures. Meanwhile, the UK 10-year gilt yield hovered near 4.995%, a level that can make equities less attractive by raising financing costs and improving returns on bonds. Sterling was little changed near $1.3427.
The rise in oil prices and bond yields has put pressure on airlines, consumer shares, and highly valued growth names, with investors closely watching for any further escalation in the Middle East or a sustained move higher in yields.
Global Context and Outlook
On Wall Street, the S&P 500 rose 1.1% and the Nasdaq gained 1.5% on Wednesday, driven by a rally in chip stocks ahead of Nvidia's results. BMO Private Wealth's Carol Schleif noted that "technology is driving the bus again today, and the AI theme," providing a positive backdrop for global equities.
However, the downside risks remain for London. A further rise in oil prices, a setback in Iran-related talks, or another leg up in gilt yields could keep pressure on the market. Company updates also remain uneven: BT still has line losses to absorb, Sage must prove its AI investments can sustain growth, and easyJet's summer season depends on late bookings materializing.
