The FTSE 100 closed higher on Thursday, rising 47.58 points or 0.5% to 10,372.93, as ongoing political turmoil was counterbalanced by positive UK GDP data, a cooling oil price, and easing gilt yields.
Market Performance
The FTSE 250 ended up 299.70 points, or 1.3%, at 22,828.07, while the AIM All-Share slipped by just 0.09 of a point to 817.12.
Political Developments
In the UK, Health Secretary Wes Streeting resigned, potentially paving the way for a leadership challenge against Prime Minister Sir Keir Starmer. Sir Keir, who led Labour to victory in 2024, is fighting to retain his position after poor local election results last week. Four junior ministers have resigned, and over 80 Labour MPs have urged him to step down, but he has vowed to continue. Mr Streeting criticised the “drift” at the top of government and told the Prime Minister it is “clear” he will not lead Labour into the next election. While stopping short of announcing a bid for the top job, Mr Streeting urged Sir Keir to allow the “best possible field of candidates” to run to replace him.
Bond and Currency Markets
The UK bond market took the political news in stride, with the yield on 10-year gilts trading at 5.00%, cooling from 5.07% the previous day. The pound fell against the dollar to 1.3480 on Thursday afternoon from 1.3505 on Wednesday, but rose against the euro to 1.1549 from 1.1542.
Economic Data
Investors also weighed encouraging UK economic growth data for the first quarter. UK gross domestic product rose 0.6% in the three months to March, accelerating from revised growth of 0.2% in the fourth quarter of 2025 and in line with consensus. Lloyds Banking analysts noted: “That represents a clear step up from the subdued performance at the end of last year. However, the timing of the data is important. Much of the strength predates the escalation in the Iran conflict, meaning the latest figures likely overstate the current pace of activity just as the outlook has become more uncertain.”
Oil Prices and Geopolitics
A lower oil price supported bond and equity markets, reflecting positive sentiment about the US-China summit. Investors hope that President Donald Trump’s visit to China will lead to progress in reaching a peace agreement with Iran and the reopening of the Strait of Hormuz. The White House said Mr Trump and Chinese President Xi Jinping held a “good” meeting, agreeing that the Strait of Hormuz “must remain open”. Iran has largely blocked shipping through the vital waterway, through which a fifth of the world’s oil and natural gas normally passes, since the outbreak of war with the US and Israel on February 28. Brent crude for July delivery traded at $104.92 a barrel on Thursday, down from $107.33 at the London equities close on Wednesday.
Global Markets
The euro traded lower against the dollar at 1.1677 on Thursday, from 1.1715 on Wednesday. Against the yen, the dollar was at 158.14, higher than 157.81. In Europe, the CAC 40 in Paris ended up 0.9%, and the DAX 40 in Frankfurt advanced 1.3%. In New York, the Dow Jones Industrial Average rose 0.8%, the S&P 500 gained 0.9%, and the Nasdaq Composite was 1.0% higher. Cisco surged 15% after better-than-expected third-quarter results and fourth-quarter guidance, raising expectations for AI sales and orders. The yield on the US 10-year Treasury narrowed to 4.46% from 4.50%, and the 30-year yield fell to 5.01% from 5.05%.
UK Stock Movers
In London, Legal & General gained 6.2% after the Financial Times reported that potential bidders had been “running the rule” over the business, though CEO Antonio Simoes denied any break-up or sale plans. Relx added 1.4% after a seminar on its Risk Business Services division. However, 3i Group slumped 13% after disappointing sales figures from its key investment, Dutch discount retailer Action. Action’s year-to-date like-for-like sales growth slowed to 2.4% from 6.8% a year prior. Dan Coatsworth of AJ Bell said 3i has “paid the price” for being too reliant on a single holding. On the FTSE 250, Tate & Lyle leapt 45% after confirming a takeover approach from Ingredion worth up to 615p per share, and Spire Healthcare soared 49% after backing a takeover proposal from Toscafund Asset Management at 250p per share.
Commodities and Outlook
Gold traded at $4,688.75 an ounce on Thursday, down slightly from $4,690.48. The biggest risers on the FTSE 100 included Legal & General, Imperial Brands, Admiral Group, British American Tobacco, and Whitbread. The biggest fallers were 3i, Burberry, Babcock International, Tesco, and Coca-Cola HBC. Friday’s global economic calendar includes US industrial data and the New York empire state manufacturing index. The local corporate calendar features trading statements from student accommodation provider Unite and building materials distributor Grafton.
