London equity markets moved into positive territory on Thursday morning as investors reacted to signals from Washington that talks with Iran may be advancing, even as military activity across the Gulf continued. The FTSE 100 was up 0.18% in early London trade, with sterling trading broadly steady at 1.3423 against the dollar.
Elsewhere in Europe, markets showed similar resilience. Germany's DAX was up 0.33% and France's CAC 40 gained 0.51% as of 03:24 ET (07:24 GMT).
Optimism in markets was centred on comments from U.S. President Donald Trump, who said the United States would recover Iran's enriched uranium "in the not-too-distant future" and that negotiations were going "very well," with a deal potentially achievable "over the weekend." House Speaker Mike Johnson added that the administration was working on the "final piece" needed to reopen the Strait of Hormuz after a White House meeting with the president and other officials.
Despite those upbeat remarks, the diplomatic situation remained fragile. Iran's Foreign Minister Abbas Araghchi was quoted as saying there had been "no tangible progress" in talks with Washington. Iran's semi-official Tasnim News reported that message exchanges with Washington had been paused for several days.
Senator Rubio told Congress that Iran had not yet given "final sign off" on key terms, including the surrender of its highly enriched uranium stockpile and the reopening of the Strait of Hormuz. He also made clear that sanctions relief would not be on the table without major nuclear concessions from Tehran.
The regional security picture added further complexity. Israel and Lebanon agreed to renew a ceasefire and to establish pilot security zones from which Hezbollah would be excluded, yet Lebanese state media reported Israeli drone strikes in south Lebanon within hours of that agreement.
On the legislative front in Washington, the U.S. House passed a war powers resolution by a 215-208 vote seeking to compel an end to the Iran conflict without congressional authorisation. The measure is largely symbolic and is not expected to clear the Senate.
Domestic data and corporate updates
Domestically, there were encouraging signs in the UK auto market. Britain's new car market recorded its strongest May since 2019, with registrations rising about 7% year-on-year, according to the SMMT. Battery electric vehicles made up 27% of new registrations in May and 24% year-to-date, still short of the mandated 33% target but moving in the right direction.
UK round up
Mitie Group reported broad-based growth for the year to March 2026, with revenue rising 10.5% to 5.62bn and a record bidding pipeline of 31.7bn. The results showed double-digit increases across revenue, profit and cash flow for the period.
CMC Markets raised its net operating income guidance by up to 22% to a range of 460-480m after posting a record annual profit. Chief executive Lord Cruddas attributed the performance to "extreme volatility" across tariffs, wars and commodities.
Taken together, diplomatic signals from the U.S., regional security developments and a mix of domestic economic and corporate news produced a market tone that was cautiously positive. Traders and investors appeared to be weighing the possibility of a diplomatic breakthrough against the practical reality that negotiations remained fragile and military activity in the region had not ceased.
Markets will likely remain sensitive to further public remarks from U.S. officials, confirmations of any deal terms, and any new developments across the Gulf that could alter risk sentiment. In the near term, the combination of geopolitical headlines and domestic earnings and data is shaping the direction of UK and European markets.