Blue chips close lower amid US-Iran stalemate

The FTSE 100 closed lower amid ongoing tensions in the Middle East, ending the week down 2.7% at 10,379.08 points. The FTSE 250 and AIM All-Share also declined by 2.7% and 1.7% respectively, reflecting investor concerns over the stalemate between the US and Iran. Oil prices continued to rise, with Brent crude reaching $105.78 a barrel, driven by uncertainty surrounding the conflict and its impact on global energy supplies. Iranian Foreign Minister Abbas Araghchi arrived in Islamabad amid speculation about potential talks related to the Middle East crisis. However, reports suggest his visit is focused on bilateral discussions with Pakistan rather than direct negotiations with the US. The Pakistani capital is preparing for a possible second round of US-Iran talks, but no confirmation has been made regarding meetings between Araghchi and US officials. Meanwhile, US Defense Secretary Pete Hegseth emphasized that the US naval blockade on Iranian ports is expanding globally and stated that the US is not eager to strike a deal, placing the responsibility on Iran to act. European markets mirrored the cautious sentiment, with Paris’s CAC 40 and Frankfurt’s DAX 40 both closing lower. In contrast, US markets showed mixed results: the Dow Jones fell slightly, while the S&P 500 and Nasdaq Composite posted gains, buoyed by strong corporate earnings such as Intel’s 23% surge following robust first-quarter results. Analysts highlight that Europe and the UK are more vulnerable to the crisis due to their reliance on imported energy, whereas the US faces fewer supply concerns despite higher crude prices. Additional economic indicators showed the US Treasury yields rising modestly, and the British pound weakening slightly against both the dollar and the euro. In the UK, retail sales grew faster than expected in March, driven by a 6.1% increase in fuel sales amid rising oil prices, underscoring the broader economic impact of the Middle East tensions on energy costs and consumer spending.