London, May 7, 2026, 18:12 BST
The FTSE 100 tumbled 1.6% to 10,276.95 on Thursday, reversing some of the prior gains as heavyweights Shell, BP, and defense stocks dragged the index lower. Investors pulled back after the recent rally. The FTSE 250, focused more on the UK domestic market, managed a slim 0.2% rise.
London’s market is caught in a tug-of-war: oil dropping under $100 brings a slight break for inflation, but energy shares take the hit. On top of that, a stronger pound chips away at FTSE heavyweights’ overseas revenues once converted. Investors are also watching as Prime Minister Keir Starmer faces a political hurdle.
This time, the election set the tone at home. Across England, voters turned out for nearly 5,000 council seats, plus parliamentary races in Scotland and Wales. Reuters noted that if Labour racks up losses, Starmer may face mounting pressure inside his own party.
Shell shares dropped 2.9%, despite the company posting adjusted earnings of $6.92 billion for the first quarter—marking a two-year high—and bumping its dividend up by 5%. “Long-term cash flows” remain strong, according to Chief Financial Officer Sinead Gorman, pointing to the dividend hike. Still, Shell trimmed its quarterly buyback program down to $3 billion from $3.5 billion. Reuters
BP shares slipped 2.6% after Brent crude slid beneath the $100 mark, with traders eyeing the possibility of a limited U.S.-Iran agreement that might ease access through the Strait of Hormuz, a key artery for oil shipments. Brent tumbled 3.17% to $98.06 a barrel in turbulent late-afternoon London trading.
Shares of BAE Systems slipped 4.7%, ranking among the FTSE 100’s steepest losers, despite the defence contractor reiterating its full-year guidance. The group expects a 7% to 9% jump in sales this year, with underlying EBIT and earnings per share seen climbing 9% to 11%. Chief Executive Charles Woodburn described a “strong start to 2026.” GlobeNewswire
Demand wasn’t uniform. Shares of Autotrader jumped 4.1% after a Reuters source said Palliser Capital, an activist investor, had accumulated as much as a 2% holding in the online car marketplace. RELX, meanwhile, dropped 6.2%—Morgan Stanley shifted its rating to equal-weight from overweight, and the shares traded ex-dividend.
Shares of Helios Towers surged 14.3%, giving a solid lift to the mid-cap index. The company bumped up its full-year adjusted core profit guidance to a range of $515 million to $530 million, and is now targeting 3,000 to 3,500 new tenancies—industry-speak for tower slots leased to telecoms operators—over the year. “Exceptionally strong” demand for data and connectivity in Africa and the Middle East is the main driver, according to CEO Tom Greenwood. Reuters
InterContinental Hotels Group added 1.5% after topping quarterly room revenue forecasts. RevPAR was up 4.4%, outpacing the 3.3% analysts had expected, thanks largely to gains in the U.S. and Greater China. CEO Elie Maalouf told analysts U.S. “consumer spending is good.” Reuters
European shares cooled off following Wednesday’s surge, as the STOXX 600 slipped 1.1%. Major markets in France, Germany, and Britain closed in negative territory. Energy names across the region took a bigger hit—dropping 2.5%—as crude pulled back.
There’s still not much depth to the peace trade. RBC’s Helima Croft pointed out it’s anyone’s guess if talks will actually lead to reopening the Strait of Hormuz. SEB Research’s Ole Hvalbye noted Brent has room to slide into the $80-$90 band if a deal gets confirmed, but if negotiations fall apart, the market could be staring at $120-plus.
London’s market isn’t moving as one. The FTSE 100 slipped, weighed by big energy and defence stocks. Still, action in domestic mid-caps and a handful of individual names gave some lift elsewhere. Investors, for now, are stuck waiting—watching for clearer direction from oil diplomacy, sterling, and the ongoing election count.
