The UK’s FTSE 100 experienced a slight decline on Thursday, influenced by a stronger pound and a downturn in oil giants Shell and BP, coinciding with local and regional elections across Britain. The blue-chip FTSE 100 index fell 0.6% to 10,380 points by 1112, while the midcap FTSE 250 gained 0.5%.

The elections may significantly undermine Prime Minister Keir Starmer’s Labour Party, rekindling doubts regarding his capacity to govern effectively. This could also indicate the onset of the decline of Britain’s conventional two-party system. A recent survey indicated that in April, British builders experienced one of the most significant month-on-month increases in cost inflation.

• The pound appreciated relative to the dollar amid optimism regarding a potential resolution to the U.S.-Iran conflict, exerting pressure on multinational corporations that derive a significant portion of their revenue from international markets.
• As earnings season progresses, markets are evaluating consumer demand alongside the potential economic ramifications stemming from the conflict in the Middle East.
• Shares of oil major Shell dropped 2% despite reporting its highest quarterly profit in two years and raising its dividend. Rival BP opens new tab fell 1.4%, as oil’s slide below $100 weighed on its stock.
• Shares of BAE Systems were down 3%, contributing significantly to the declines on the FTSE 100, following the defence firm’s decision to maintain its full-year outlook.
• InterContinental Hotels Group opened new tab rose 2.7% after topping quarterly room revenue estimates as its U.S. business rebounded.
• Autotrader Group gained 4% after a source informed that activist investor Palliser Capital has accumulated a 2% stake in the company.
• Helios Towers opened a new tab and experienced a 16% increase, contributing positively to the mid-cap index, following the mobile tower operator’s upward revision of its annual profit forecast.