British stocks rose on Thursday, as optimism from US President Donald Trump about an imminent deal with Iran helped offset the ongoing military escalation in the Gulf region, with the index recovering from Wednesday's losses and trading in positive territory at the start of the London session.
The FTSE 100 index rose 0.18%, while the pound remained relatively stable at 1.3423 against the dollar. European markets showed similar resilience, with Germany's DAX index adding 0.33% and France's CAC 40 index climbing 0.51%, as of 10:24 a.m.
This cautious optimism was bolstered by statements from Trump, who confirmed that the United States would recover Iran’s enriched uranium in the near future, indicating that negotiations were progressing very well, with the possibility of reaching an agreement over the weekend.
House Speaker Mike Johnson added that the administration is working on the final piece needed to reopen the Strait of Hormuz, after spending three hours at the White House with Trump, Vance, and Rubio.
However, the diplomatic background remains fragile; Iranian Foreign Minister Abbas Araqchi confirmed that no tangible progress had been made in talks with Washington, while the semi-official Iranian news agency Tasnim reported that the exchange of messages with Washington had stopped for several days.
Secretary of State Rubio informed Congress that Iran has not yet given its final approval to key terms, including giving up its stockpile of highly enriched uranium and reopening the Strait of Hormuz, stressing that sanctions relief remains off the table without substantial nuclear concessions.
On the diplomatic front, Israel and Lebanon agreed to renew the ceasefire and establish experimental security zones excluding Hezbollah, although official Lebanese media reported Israeli drone strikes on southern Lebanon within hours of the announcement.
The US House of Representatives also passed a resolution on war powers by a vote of 215 to 208, obligating Trump to end the conflict with Iran without congressional authorization, although this resolution is largely symbolic and unlikely to pass in the Senate.
On a more positive note, the UK new car market recorded its strongest performance in May since 2019, with registrations rising by around 7% year-on-year, according to the Society of Motor Manufacturers and Traders (SMMT), driven by strong demand from individual buyers.
Fully electric vehicles accounted for 27% of all new registrations last month, bringing their cumulative share since the beginning of the year to 24%, which is still below the mandatory target of 33%, but is moving in the right direction.
UK Markets Summary
Mitie Group recorded double-digit growth in revenue, profit and cash flow for the year ending March 2026, with revenue rising 10.5% to £5.62 billion, and a record order line of £31.7 billion.
CMC Markets raised its net operating income forecast by up to 22% to between £460 million and £480 million, following record annual profits, with Chief Executive Lord Croods praising the sharp fluctuations in tariffs, wars and commodities.
