European markets made modest gains on Thursday as traders positioned themselves ahead of the European Central Bank’s widely anticipated interest-rate announcement later in the session.
The FTSE 100 rose 0.06% in early trading, with Germany’s DAX climbing 0.12% and France’s CAC 40 advancing 0.30% in parallel moves across the continent.
Sterling held firm against the U.S. dollar, trading at $1.3554, representing a gain of 0.07% on the day as currency markets remained relatively stable.
A 25-basis-point increase across all three ECB benchmark interest rates was priced in as near-certain by markets, leaving investors focused on the tone of any accompanying policy guidance.
Geopolitical risk remained a dominant theme, with Iranian state media reporting that projectiles struck several locations along Iran’s southern coastline in Sirik early Thursday, with explosions also reported across Minab County and Qeshm Island.
Vessel transits through the Strait of Hormuz dropped sharply to seven on Wednesday from 12 a day earlier, falling well below the 10-day average of 14 vessels, according to preliminary ship-tracking data cited by Reuters.
Some ships were operating with their transponders switched off, meaning the data may not capture all vessel movements through the strategically critical waterway.
CBS News reported that multiple U.S. military aircraft were damaged by Iranian ballistic missile strikes on the Al Azraq airbase in Jordan, citing sources with direct knowledge of the matter.
Around eight F-15 aircraft sustained light damage and subsequently returned to service, while an A-10 Thunderbolt lost a wing, with U.S. forces firing more than 30 Patriot missiles in response, according to CBS News.
Iran’s Islamic Revolutionary Guard Corps said the attacks were retaliation for U.S. strikes on five Iranian oil tankers on Tuesday, deepening what has become a significant military exchange between the two nations.
Speaking at the Republican midterm convention in Dallas on Wednesday, U.S. President Donald Trump said Washington was “winning” the conflict and predicted that oil prices would decline after the war ended following November’s elections.
Trump also left open the possibility of negotiations, offering a note of diplomatic ambiguity even as military operations continued on both sides.
ING analysts warned that current signals “point to further escalation, keeping upside pressure firmly in place,” adding that significant disruption to Strait of Hormuz flows could tighten the oil market “more sharply” than recent weeks had indicated.
ING also noted increased Chinese activity in the physical oil market, particularly in the North Sea, while flagging that Beijing’s purchasing behaviour would be “crucial to the outlook” given that Chinese crude imports remain below year-earlier levels.
Brent crude futures for November delivery fell 0.37% to $100.89 a barrel, while October U.S. West Texas Intermediate futures declined 0.23% to $95.83 as traders weighed the conflict’s trajectory.
December gold futures slipped 0.08% to $4,456.97 an ounce, while spot gold gained 0.26% to $4,413.22, reflecting cautious safe-haven demand amid the geopolitical uncertainty.
On the diplomatic front, Foreign Secretary Ed Miliband described Israel’s decision to close London’s consulate in Jerusalem as “regrettable and damaging,” adding a further layer of tension to UK foreign policy discussions.
UN special rapporteur Francesca Albanese described a UK-led ban on imports from illegal Israeli settlements as “potentially seismic,” though she said the measure should also cover East Jerusalem and Gaza.
In corporate news, Associated British Foods (LSE:ABF) confirmed that Primark plans to introduce home delivery in the UK, though like-for-like sales are expected to decline 3% in the fourth quarter to 12 September.
Currys (LSE:CURY) delivered a strong trading update, reporting 7% like-for-like sales growth in the first quarter driven by demand for cooling products during the summer heatwave and growth in its Nordic operations.
THG (LSE:THG) reported that first-half adjusted EBITDA more than doubled to £42.8 million, though the company cautioned that EU parcel duties are expected to limit third-quarter revenue growth to approximately 2%.