May proved to be a surprisingly resilient month for the FTSE 100, which edged up a modest 0.29% despite the world confronting a significant energy shock.
The UK blue-chip index closed at 10,409.28 on 29 May, leaving it around 500 points below its all-time high reached on 27 February, the day before the Iran conflict began.
US markets rallied late on Friday after President Donald Trump announced plans to lift the US blockade of the Strait of Hormuz shipping lane as part of a peace deal.
Brent crude dropped sharply to $91 a barrel following the announcement, its lowest level in six weeks and well below its peak of $118 reached on 29 April.
However, some investors remain cautious, noting that Tehran is taking a hardline position while tanker traffic stays disrupted, inventories continue shrinking, and Middle East production remains suppressed.
June also brings a major market event, with Elon Musk’s SpaceX set to float in what has been described as the biggest IPO in history, a development likely to stoke further debate around a potential tech and AI bubble.
Against this uncertain backdrop, the single worst-performing FTSE 100 stock over the past three months has been private equity specialist 3i Group, with shares down 45% over the last year.
3i has been running a portfolio of companies since 1946, but non-food discount retailer Action now dominates its operations, accounting for more than 70% of the total 3i portfolio.
Action, which operates more than 3,300 stores across Europe, reported a 14% rise in Q1 net sales to €4.01bn on 14 May, though like-for-like sales growth slowed sharply from 6.8% to just 2.4%.
Cooler weather, tougher comparisons, and the Iran conflict were cited as contributing factors, and even a £750m share buyback failed to lift investor sentiment following the update.
Where 3i once traded at a premium to its net asset value, it now sits at a 25% discount, while its trailing dividend yield has risen to 3.7%, representing a potentially compelling entry point for patient investors.
Much will depend on Action’s ambitious push into the US market, a notoriously difficult retail environment, with the outcome likely to play a significant role in shaping the stock’s recovery prospects.