London's stock market closed lower on Thursday, with the FTSE 100 index dropping 77.80 points, or 0.7%, to 10,639.17. The mid-cap FTSE 250 also fell significantly, down 299.30 points, or 1.3%, to 23,627.33. This decline was primarily attributed to an escalation of the Middle East conflict, which caused crude oil prices to surge past the crucial $100 per barrel mark. Specifically, Brent oil topped $100 a barrel for the first time since May, reaching $100.08 a barrel on Thursday afternoon, up from $93.74 late on Wednesday, after Yemen's Houthi rebels attacked two Saudi tankers in the Red Sea.
The intensified geopolitical tensions also led to a rise in government bond yields and renewed inflation concerns, contributing to a global risk-off sentiment. Miners were among the hardest hit sectors, dropping 5% on rising inflation concerns. Meanwhile, energy giants saw some advancements due to the higher oil prices. The European Central Bank, keeping interest rates unchanged, signaled growing concern that elevated energy prices could reignite inflation, with President Christine Lagarde suggesting a potential interest rate hike as early as September if energy costs remain high.
Centrica, the owner of British Gas, was a major drag on the FTSE 100, seeing its shares sink 10%. The company reported a 9.5% fall in adjusted operating profit to $497 million for the first half of 2026, missing the consensus of $485 million. Adjusted EBITDA also declined 18% to $737 million, below the $775 million consensus. Centrica now expects its Retail unit's adjusted EBITDA for 2026 to be at the lower end of its $500 million to $800 million guidance, and Centrica Energy's EBITDA for 2026 to be around $200 million to $250 million, below the consensus of $298 million.
