FTSE 100 Ends 7-Day Rally After U.S.-Iran Air Strikes

The FTSE 100 fell 0.8% to 10,418.33 on Thursday by 1013 GMT, snapping a seven-day winning streak as markets reacted to air strikes exchanged between the United States and Iran.

The domestically focused FTSE 250 slipped 0.4% from a near three-month high.

The exchange of strikes highlighted fragility in ceasefire talks that began in early April and weakened investor sentiment after recent gains driven by hopes the Strait of Hormuz could return to more normal shipping and by easing expectations for further domestic interest rate rises.

Energy and defense stocks were the only major sectors to post gains during the session, supported by concerns over security and potential supply disruptions. Technology-linked names and domestically focused firms moved lower.

Telecoms group BT led declines on the FTSE 100, falling about 4.7% after reports said the British government would oppose an attempt by Sunil Bharti Mittal to increase his stake in the company. The fall in BT added pressure to the broader index.

PPHE Hotel Group shares jumped 23% after the company received a £920.9 million takeover proposal from Fattal Hotel Group. Chipmaker IQE dropped 3.3% after reporting a decline in full-year adjusted core profit.

Ousted BP chair Albert Manifold acknowledged he may have pushed hard for change following his dismissal and denied any misconduct. BP shares were largely unchanged.

Traders continued to monitor developments around the Strait of Hormuz and the wider Middle East for potential effects on oil flows. Markets had been supported earlier by easing rate expectations; the session reversed recent gains in UK equities as geopolitical tensions rose.