The FTSE 100 fell around 1.5% to 10,131.97p as the Iran war disrupted multiple sectors. Oil prices breached $100 for the first time since the 2022 energy crisis on Monday morning, stoking inflation fears. Investors are pricing against an interest rate cut at the next Bank of England meeting due to the oil price surge. Shell shares rose 1.7% to 3,188.00p and BP rose 1.3% to 505.50p, while Lloyds shares fell 1.7% in early trading. Gold miner Fresnillo, the FTSE 100's top riser of 2025, fell 2%.
Reckitt missed quarterly revenue expectations due to disruption from the Iran war and changes to EU sanctions on Russia, according to multiple reports. The company reported 1.3% growth in like-for-like net revenue for its core business in Q1, below expectations. Reckitt experienced a 'double-digit' decline in its emerging-market household care business due to changes to Russian sanctions banning exports of germ protection and cleaning products. The company confirmed it is still in the process of transferring ownership of its Russian business, which began in April 2022. Reckitt was also hit by higher supply costs caused by the conflict in the Middle East. Its operations and supply in its Middle East business were disrupted, resulting in no like-for-like net revenue growth in Q1.
In light of the uncertainty arising from the conflict in the Middle East, the group is taking a more cautious outlook reflecting the impact on passenger numbers and weaker consumer confidence. Much will depend on the peak summer trading period and the group assumes no immediate improvement in consumer confidence and assumes that jet fuel supplies can be maintained.
Reckitt warned of lower margins in the first half of the year due to higher oil prices and lower demand for cold and flu products, according to multiple reports. If oil remains at $110 per barrel for the rest of 2026, Reckitt estimates a £130-150 million hit to its input cost base. The company expects to offset costs through supply chain efficiencies, hedging, and price rises, but anticipates an impact on consumer demand due to pressure on household budgets. In the first half, Reckitt's group adjusted operating profit margin is expected to be around 200 basis points below the 24.6% reported for the same period last year. Reckitt maintained its full-year forecasts assuming no further impact from the war beyond the first half. Its germ protection brands such as Dettol and Lysol delivered growth of 9.5%. Reckitt shares fell as much as 5.6% to their lowest level since October 2024 before recovering to trade down 4.96% at 4,674p.
WH Smith cut its full-year profit outlook and halted shareholder dividend payouts due to the Iran war impacting air travel, according to multiple reports. The company expects full-year profits to fall to between £90 million and £105 million, down from £108 million last year and lower than previous guidance of £100-115 million. WH Smith suspended its dividend to bolster its balance sheet. Its like-for-like UK revenues flatlined in the first seven weeks of its second half due to lower passenger numbers amid Iran war disruption, while group-wide revenues edged 2% higher in the period. WH Smith shares fell more than 10% in morning trading on Thursday.
The immediate focus is to restore confidence and ensure the right foundations are in place to support profitable growth and long‑term value creation. Moving forward, the board and management team will have a relentless focus on driving cash, cost discipline and strengthening the balance sheet. As a first step, the board has taken the prudent decision to suspend the dividend.
WH Smith's woes were compounded by a costly accounting blunder in its US division, which led to share price declines, the departure of former CEO Carl Cowling, and an FCA probe. An independent review by Deloitte found 'shortcomings' in which WH Smith overstated profits in the US business by up to £50 million due to audit issues. Leo Quinn, former Balfour Beatty boss, was brought in as executive chairman on April 7. WH Smith's underlying pre-tax profits fell to £3 million for the six months to February 28 from £21 million a year earlier. In a company statement, WH Smith said: 'In light of the uncertainty arising from the conflict in the Middle East, the group is taking a more cautious outlook reflecting the impact on passenger numbers and weaker consumer confidence. Much will depend on the peak summer trading period and the group assumes no immediate improvement in consumer confidence and assumes that jet fuel supplies can be maintained.' Leo Quinn, executive chairman, said: 'The immediate focus is to restore confidence and ensure the right foundations are in place to support profitable growth and long‑term value creation. Moving forward, the board and management team will have a relentless focus on driving cash, cost discipline and strengthening the balance sheet. As a first step, the board has taken the prudent decision to suspend the dividend.'
Rolls-Royce shares fell as much as 5% at open before recovering to a 3% loss at 1,225.00p. Global air travel demand worries weighed on Rolls-Royce due to flight path disruptions from the Middle East conflict, according to multiple reports. Airspace over the southern half of Azerbaijan faced closure, adding pressure on limited airspace after disruptions in the Gulf. Wizz Air warned the conflict would reduce its income by €50 for the financial year ending March 31, sending airline stocks crashing. British Airways owner IAG and Easyjet have fallen over 10% in the last week. According to City AM, Dan Coatsworth described investors as now weighing up the prospect of the Iran conflict lasting longer than they previously thought, and locking in profits on areas of the market that have served them well, such as shares in Rolls-Royce and Lloyds, and gold.
Investors are now weighing up the prospect of the Iran conflict lasting longer than they previously thought.
Evaporated
Lock in profits on areas of the market that have served them well in recent months and years, such as shares in Rolls-Royce and Lloyds, and gold