Geopolitical Tensions Spike as Iran Closes Strait of Hormuz, Pressuring FTSE 100

The FTSE 100 retreated on Thursday, ending the session lower as investors reacted to escalating tensions in the Middle East. The benchmark index fell 34.43 points, or 0.33%, to close at 10,574.45, after an initial climb to 10,644.15. The market downturn was triggered by Iran's decision to close the Strait of Hormuz and threats to abandon a truce agreement with the United States. This escalation coincides with ongoing Israeli military operations in Lebanon and warnings from U.S. President Donald Trump that military forces will remain deployed until Tehran adheres to a "real agreement." Energy markets reacted sharply to the supply risk, with Brent crude futures surging nearly 4% to reach $98.53 per barrel. This price spike has intensified concerns regarding global inflation and the likelihood of central banks maintaining or increasing interest rates to combat rising costs. Equity performance was mixed but skewed negative. Energy giant BP gained 2.5% on the back of rising oil prices, while other sectors struggled. Standard Life saw the steepest decline, falling over 4%, followed by Fresnillo at 3.7% and Reckitt Benckiser at 3.1%. A broad range of stocks, including Lloyds Banking Group and Standard Chartered, saw losses between 1.6% and 2.7%.