British stocks fell on Thursday as Iran's threat to strike regional infrastructure overshadowed stronger-than-expected UK growth data. Strategists warned the Strait of Hormuz standoff could persist for weeks, keeping upward pressure on oil.
European equities slipped on Thursday as escalating conflict between the United States and Iran pulled attention away from stronger-than-expected UK growth data. The FTSE 100 was down 0.37%, extending losses from Wednesday's close, while Germany's DAX slipped 0.22% and France's CAC 40 fell 0.21%. Sterling was down 0.01% to $1.3535.
UK growth beats forecasts
The retreat came despite UK GDP data that beat expectations. The economy grew 0.7% in the three months to May, ahead of forecasts of 0.5%, with annual growth accelerating to 1.3%, the fastest pace in 13 months. Monthly output rose 0.1% in May, recovering from a 0.1% fall in April, driven by a 0.3% rise in services.
But the data did little to lift the FTSE 100, as the geopolitical picture dominated.
Strikes and threats escalate
A spokesman for Iran's military headquarters warned early Thursday that "all infrastructure in the region" would be crushed if the U.S. followed through on threats to attack Iran's own infrastructure. The warning responded to President Donald Trump's earlier threat that Washington would knock out Iran's power plants and bridges unless Tehran returned to the table.
U.S. forces intensified strikes early Thursday, hitting targets around Tehran and in Semnan province, home to Iran's ballistic missile programme, while also firing on a vessel accused of breaching Washington's naval blockade. Iran retaliated before dawn with missile and drone strikes on Bahrain, Jordan and Kuwait.
Oil stays under pressure
Traffic through the Strait of Hormuz has slowed significantly, Jefferies strategist Mohit Kumar said in a note, adding that Iran is not interested in negotiations. The bank said it was keeping risk levels low while still expecting a deal eventually, with the standoff seen persisting for a few weeks and keeping oil on upward pressure.
Commodities stayed elevated but eased on the day. Brent crude was last down 0.38% at $84.63, while WTI slipped 0.08% to $79.54.
Source: Investing.com
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