Stock Market Impact: The FTSE 100 slipped 0.8% to close lower, while Germany’s DAX fell 0.3% and France’s CAC 40 dropped 0.2%; Sterling edged up 0.1% to $1.3439. The decline was driven by heightened cease‑fire fears after Iran’s Revolutionary Guards fired a ballistic missile toward Kuwait, which was intercepted by Kuwaiti forces.
Listed Companies and Sectors:
BT Group: Shares fell after the British government announced it would oppose Indian billionaire Sunil Bharti Mittal’s attempt to raise his 24.95% holding in the telecoms group, citing protection of critical national infrastructure.
SSE Plc: Reported lower annual earnings, attributing the dip to record‑level investment in electricity networks and renewable assets that offset stronger transmission performance.
Johnson Matthey Plc: Delivered better‑than‑expected free cash flow, boosted by stronger Clean Air margins despite weakness in its PGM Services division.
IQE Plc: Recorded a sharp fall in annual revenue and EBITDA but projected more than 20% sales growth in 2026, driven by demand from AI and data‑centre applications.
Investment Flows: No specific FDI/FPI data were provided, but the geopolitical escalation and energy‑price concerns could temper foreign portfolio inflows into European equities.
Interest Rates, Inflation, and Liquidity: ECB chief economist Philip Lane warned that the Middle‑East energy shock could generate “second‑round effects” on inflation, even if the conflict is resolved quickly. Markets have already priced in two ECB rate hikes with roughly even odds of a third, indicating expectations of tighter monetary conditions.
Fiscal or Monetary Policy: No direct fiscal measures were announced. The U.S. response included a strike on a ground control station near Bandar Abbas and statements from President Donald Trump and Secretary of State Marco Rubio emphasizing a mix of diplomatic and military options.
