FTSE 100 today: UK stocks edge higher as Trump reportedly signals Iran war exit

U.S. reports that President Trump is open to winding down military operations against Iran even if the Strait of Hormuz remains largely blocked, prompting risk-on moves (FTSE 100 +0.2%, GBP/USD 1.3202) and supporting a bounce in gold despite its weak March performance. UK Q4 2025 GDP grew 0.1% q/q (final), with 2025 annual GDP revised up to +1.4%; consumer spending +0.1% q/q and business investment -2.5% q/q. Corporate highlights: Raspberry Pi adjusted EBITDA +25% to $46.4m and revenue +25% to $323.2m (Jefferies raised 2026 revenue forecast +42%), A.G. Barr adj. pretax £65.8m (+12.5%) beat expectations, while Future PLC cut full-year guidance by 15-20%.

Analysis

Recent signals of military de‑risking have removed a portion of the immediate tail premium from energy and safe‑haven assets, but the market is pricing a hybrid outcome: lower probability of escalation-driven spikes while accepting a sustained structural hit to shipping economics if the Strait remains impaired. Mechanically, rerouting crude via the Cape or longer transits adds measurable time and fuel cost that translates into wider regional crude differentials and persistent tanker demand — that supports owners and storage economics even as headline Brent volatility falls.

For FX and UK assets the interplay is nuanced: a softer risk premium favors carry into GBP and tilted equity flows into large-cap exporters and infrastructure names, yet domestic demand softness keeps a ceiling on cyclical rebounds; modest GBP strength could compress sterling‑sensitive revenues for small domestics while helping debt servicing for companies with FX‑indexed costs. Liquidity rotation out of gold and into cyclicals is plausible in the next 1–3 months if real yields firm, but a single severe proxy incident can snap flows back in days.

Second‑order winners are companies exposed to rerouting and connectivity — subsea fibre and VLCC owners capture prolonged reroute rents, ports on alternative corridors see durable volume gains, and defense/surveillance vendors face sustained demand for littoral capabilities even after kinetic operations scale back. Key near‑term catalysts to watch are tanker time charter rates (TD3/TD20), Brent term structure moves (flattening back to contango), and GBP/USD through 1.34/1.30, which will re‑price carry and equity allocation decisions.

Tail risks remain asymmetric: a rapid re‑escalation or coordinated proxy campaign could recreate a 30–60 day volatility spike, while a diplomatic settlement that reopens logistics corridors would compress freight and storage premiums over 3–9 months. Position sizing should therefore differentiate between trading (2–12 week) and strategic (6–18 month) buckets and use liquid options to cap downside on directional views.

Key Decisions for Investors

• Long 3I Infrastructure (LON:3IN) — buy a 2–3% portfolio position targeting 8–12% return over 6–12 months. Thesis: durable demand for subsea connectivity and higher returns from captive infrastructure assets if rerouting persists. Risk management: stop at -6% or trim to lock 50% gains at +8%.
• Short GLD via 3‑month put spread (buy GLD Jul put 1% OTM, sell GLD Jul put 6% OTM) — size <1% NAV, expected payoff if gold risk premium compresses. R/R: cap downside at premium paid (~0.6% NAV) vs potential 4–6% move lower in GLD; close if real yields weaken materially or GLD > +5% from entry.
• Long GBP/USD directional — buy 3‑month call (1.34 strike) or spot with a tight stop: target GBPUSD 1.36 within 1–3 months for ~3–4% P/L. Size 1–2% NAV. Stop-loss: 1.30. Rationale: de‑risking and modest UK resilience support carry and capital flows; blow‑up risk from UK domestic demand data or BoE surprise tightening is main reversal vector.
• Trade shipping angle: long selective tanker exposure (e.g., NYSE:FRO or EURONAV) via 6‑month purchase or 3‑month call structure — target 15–30% upside if charter rates remain elevated from rerouting. Keep position small (1–2% NAV) and set a 12% stop; hedge with short IDS on broader oil if Brent collapses.
• Option tail hedge: buy 9–12 month OTM puts on broad equity exposure (e.g., S&P put 5–7% OTM) sized to protect 3–5% portfolio drawdown. Cost is insurance against rapid re‑escalation; remove if tanker indices and Brent realized volatility fall below historical 90‑day averages.