Stocks in London are poised for a weaker open on Thursday as investors weigh mixed signals from Middle East peace negotiations, softer sentiment on Wall Street and fresh concerns over the outlook for global growth.
The FTSE 100 is expected to open around 46 points lower after ending Wednesday’s session down 0.4% at 10,332.30. Risk appetite has weakened following another round of conflicting headlines from the Middle East, where diplomatic efforts continue to compete with ongoing military activity.
A potential breakthrough emerged after Israel and Lebanon agreed to implement a ceasefire framework following US-led talks in Washington. The agreement includes the creation of pilot security zones controlled exclusively by the Lebanese armed forces and plans for further negotiations later this month aimed at reaching a broader political settlement.
However, optimism remains tempered by continued tensions involving Iran. Tehran’s foreign minister said there had been no meaningful progress in negotiations with the US, despite President Donald Trump’s assertion that a deal could be reached as soon as this weekend. The future of Iran’s highly enriched uranium stockpile remains one of the key obstacles to a comprehensive agreement.
Oil markets reflected the uncertain backdrop, with Brent crude easing slightly to around US$97 per barrel as traders balanced hopes for diplomacy against the risk of renewed escalation.
Across the Atlantic, Wall Street endured a weaker session. The Dow Jones Industrial Average fell 1.2%, while the S&P 500 and Nasdaq lost 0.7% and 0.9% respectively. Investor sentiment was dampened by the Federal Reserve’s latest Beige Book, which pointed to only modest economic growth and subdued business confidence.
Asian markets followed Wall Street lower, with losses recorded across Japan, Hong Kong, China and Australia as investors adopted a more defensive stance ahead of key economic releases.
Australian shares fell on Thursday despite stronger-than-expected trade data, as broader risk-off sentiment weighed on regional markets.
The S&P/ASX 200 declined 1.2%, even after figures from the Australian Bureau of Statistics showed the country’s trade balance returned to surplus in April.
Meanwhile, gold prices moved higher as investors sought safe-haven assets amid the uncertain backdrop. Spot gold rose to USD4,473.40 an ounce early Thursday, up from USD4,443.05 on Wednesday, extending recent gains as traders balanced geopolitical risks against expectations for future central bank policy.
