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UK Stocks Drop on Renewed US-Iran Tensions

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Britain's FTSE 100 closed Thursday trading 0.75% in the red amid increased uncertainty surrounding ceasefire talks between the US and Iran after the two sides traded fresh strikes.

Renewed instability in the Middle East kept investors on edge after the US struck military targets in Iran, while Tehran launched missiles toward a US air base in Kuwait in retaliation. The developments pushed oil prices higher, raising concerns over renewed inflationary pressures globally

Back home and in corporate news, SSE (SSE.L) delivered earnings growth for fiscal 2026 and raised its full-year dividend to 0.687 pound sterling per share from 0.642 pound per share, while its adjusted capital investment jumped 20% to 3.6 billion pounds, mainly in its electricity transmission business, SSEN Transmission. The utility fell 1.03% at close.

"We met all our financial and operational targets and delivery of our fully-funded [33 billion-pound] investment plan to 2030 - focusing on Networks, Renewables and Flexibility - is well under way," Chief Executive Martin Pibworth said. "That investment is central to long‑term value creation."

Meanwhile, Johnson Matthey (JMAT.L) reported a loss for the year ended March 31, 2026, compared with a profit a year ago, while keeping its total dividend. For fiscal 2027, it anticipates low to mid single digit percentage growth in group underlying operating profit at constant precious metal prices and constant currency. The chemicals company edged down 0.18%.

Johnson Matthey also agreed to buy US-based selective catalytic reduction catalysts manufacturer Cormetech for an enterprise value of $360 million. Closing of the deal is expected in June or July, subject to regulatory approvals.

On the economic front, UK vehicle output declined 1.2% year over year to 58,513 units in April, while exports rose 0.8%, according to data from the Society of Motor Manufacturers and Traders. Chief Executive Mike Hawes said the latest figures "suggest production is stabilising, albeit at reduced levels, when the ambition remains to grow the sector."

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Swiss Equities Slip as Renewed Middle East Tensions Rattle Markets

Swiss shares dropped alongside European peers on Thursday, with the Swiss Market Index closing 0.90% lower, as a fresh escalation in tensions between the US and Iran weighed on investor sentiment.US forces struck down Iranian drones in a fresh bout of fighting along the Strait of Hormuz, prompting retaliation from Tehran despite a ceasefire agreement remaining in place. US President Donald Trump said earlier that the strait is "going to be open to everybody" and suggested that the military "go back and finish it."Among the biggest decliners in the blue-chip index were Partners Group (PGHN.SW), Swiss Life (SLHN.SW) and Alcon (ALC.SW), which fell 2.46%, 2.41% and 1.97%, respectively.Meanwhile, Galenica (GALE.SW) reported sales growth of 7.3% to 1.41 billion francs in the first four months of 2026, driven by strong performance in its pharmacy and wholesale businesses. The company confirmed its 2026 guidance, including sales growth of 5% to 7%. The stock was down 0.66% at close.On the economic data front, data from the Federal Statistical Office showed nonfarm payrolls growing 0.5% annually in the first quarter, compared with a 0.2% uptick in the previous three months.KOF leading indicators are scheduled for release on Friday.

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Asia Markets

German Blue-chip DAX Index Blinks Red Amid Reignited US-Iran Conflict

Germany's blue-chip DAX index was downbeat on Thursday, closing 0.34% lower, as a fresh exchange of strikes threatens to derail US-Iran ceasefire talks.Reuters reported, citing an unnamed US official, that the US military launched defensive strikes in Bandar Abbas, Iran, shooting down four Iranian drones and targeting a ground control station. In response, Iran's Revolutionary Guard claimed it targeted the US air base responsible for the attack.Meanwhile, Washington and Tehran have yet to resolve critical impasses in negotiations, with US President Donald Trump saying he is "not satisfied" with the current terms. The White House also refuted the unofficial draft released by Iranian state TV, saying it was a "complete fabrication."The rising tensions lifted German defense stocks, including arms maker Rheinmetall (RHM.F), military and civilian propulsion systems group Renk Group (R3NK.F) and defense technology company Hensoldt (HAG.F), which gained 4.15%, 5.44% and 5.88%, respectively, on Xetra.Rheinmetall shares received an additional boost after securing a 1.02 billion-euro order for over 2,000 military transport vehicles for the German armed forces, or Bundeswehr. The order falls under a framework contract signed in 2024 for up to 6,500 vehicles.In other corporate updates, Bayer (BAYN.F) is facing a lawsuit from US seed company Latham Quality, which alleges the German life sciences company monopolized the genetically engineered corn seed market through anti-competitive pricing and blocking generic competitors. The plaintiff is seeking damages and an injunction to restore market competition.In an emailed statement to, Bayer said the claims "lack merit," and intends to answer the allegations in court, adding that the crop input and corn seed markets are "competitive, fair and diverse." The stock was down 0.73% at the close.On the economic side, the euro area economic sentiment indicator edged up to 93.5 in May from a revised 93.2 a month earlier, according to the European Commission's monthly survey. Meanwhile, the final consumer confidence index stood at -19 points, confirming the flash estimate and against the -20.6 points previously.

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Asia Markets

European Stocks Close Lower in Thursday Trading; Defense Stocks Rally as US-Iran Tensions Persist

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