FTSE 100 shrugs off political drama as oil price dips

The FTSE 100 closed 0.5% higher at 10,372.93 on Thursday, shrugging off political instability in the UK. Health Secretary Wes Streeting resigned, criticizing government drift and urging Prime Minister Sir Keir Starmer to allow a leadership contest, as over 80 Labour MPs called for Starmer’s resignation following weak local election results. Despite the turmoil, UK gross domestic product grew 0.6% in the first quarter, accelerating from a revised 0.2% in Q4 2025, though analysts noted the data predates escalating tensions in the Iran conflict. The UK bond market remained steady, with 10-year gilt yields falling to 5.00% from 5.07% the prior day. Sterling weakened slightly against the dollar to 1.3480 but strengthened against the euro to 1.1549. Investors also reacted to a dip in Brent crude prices to $104.92 per barrel, down from $107.33, as hopes grew for a US-China breakthrough in resolving Iran’s blockade of the Strait of Hormuz. The White House confirmed President Donald Trump and Chinese leader Xi Jinping agreed the waterway, critical for global oil supply, must remain open. The FTSE 250 rose 1.3% to 22,828.07, while the AIM All-Share remained nearly flat. European markets followed suit, with the CAC 40 up 0.9% and the DAX 30 advancing 1.3%. In the US, the Dow Jones Industrial Average gained 0.8%, the S&P 500 rose 0.9%, and the Nasdaq Composite climbed 1.0%. Cisco surged 15% after reporting stronger-than-expected third-quarter results and raising AI-related sales forecasts, citing record demand for its technology. The US 10-year Treasury yield dipped to 4.46% from 4.50%, reflecting broader market optimism. Analysts from Lloyds Banking Group noted the UK’s economic growth may overstate current activity, as much of the Q1 performance occurred before Iran’s conflict intensified. Meanwhile, global oil prices remained volatile, influenced by geopolitical developments and expectations of a potential easing in Middle East tensions.