London's FTSE 100 closed 0.12% lower on Tuesday as tensions over the Strait of Hormuz remained elevated, while weaker-than-expected UK retail sales growth highlighted pressure on consumer demand.
In response to Iran's demands over the weekend, the US set its own conditions for a near-term resolution to their conflict, which included war compensation. US President Donald Trump said this demand would be a part of "any, and all, future negotiations." As shipping through Hormuz remained virtually closed, Brent oil gained once again, propelling shares of energy majors BP (BP.L) and Shell (SHEL.L) up by 1.75% and 1.41%, respectively.
At home, annual retail sales growth eased to 1% on a like-for-like basis in July, from 1.7% in June, according to data from the British Retail Consortium. Analysts had expected growth to slow down slightly to 1.6%. However, BRC said consumers were conscious of their budgets while shopping for summer clothes, home entertainment, and garden-related items during the warm weather.
"Consumer demand has struggled in the heat, leaving retailers facing a challenging start to the second half of the year," BRC Chief Executive Helen Dickinson said. "Household budgets remain stretched, consumer confidence is fragile, and retailers continue to grapple with rising operating costs. If the Government wants to drive growth and keep inflation under control, it must reduce the cost of doing business by tackling the taxes and regulatory burdens that are holding back investment and putting upward pressure on prices."
In corporate news, thermal energy and fluid technology company Spirax Group (SPX.L) reported year-over-year growth in first-half attributable profit to 97.5 million pounds sterling from 62.7 million pounds, with revenue rising 5% to 863.8 million pounds. However, the stock was the worst performer of the blue-chip index, falling 5.36% at the end of the session.
"Solid first half and unchanged FY [outlook] as strength in [Electric Thermal Solutions] / Watson Marlow is offset by a more limited progression in Steam," RBC Capital Markets said. "We expect cyclical improvement to continue in 2026, but with the share still at a sector premium on 2026E [enterprise value]/EBITA, a further re-rating likely needs more than just a cyclical uptick. We see the low medium-term growth profile at Steam (with volume growth at ~1% per annum) as a headwind to a higher valuation."
Meanwhile, InterContinental Hotels Group (IHG.L) was up 0.06% as interim attributable profit declined annually to $425 million from $469 million. "IHG's revenue came in line with consensus despite a slight miss in EBIT, while adjusted EPS beat thanks to strong margin delivery and buybacks," said AlphaValue/Baader Europe. "[Revenue per available room] growth accelerated, driven mainly by rate as fee revenue growth outpaced costs. Growth was broad-based, with the Americas leading, China returning to growth on leisure strength, and EMEAA holding up despite Middle East disruption."
Lion Finance Group (BGEO.L) booked a yearly rise in first-half attributable profit and net operating income and announced a 59 million-Georgian-lari extension to its share buyback and cancellation program. The lender gained 0.96%.