London stocks were still weaker by midday on Thursday amid rising geopolitical tensions, but BAE Systems surged on the back of US President Donald Trump's defence spending plans, while retailers were in focus following a flurry of updates from the sector.
The FTSE 100 was down 0.3% at 10,019.07.

Sentiment took a hit after the US seized two oil tankers on Wednesday linked to Venezuelan oil exports in the North Atlantic and the Caribbean, one of which was a Russian-flagged vessel.

On home shores, the latest figures from Halifax showed that house prices fell 0.6% on the month in December following a 0.1% decline in November, missing expectations for a 0.2% increase.

On the year, house prices rose 0.3% in December following a 0.6% jump the month before. Analysts were expecting an annual increase of 1.1%.

The average price of a property stood at £297,755 in December - the lowest since June 2025 - down from £299,544 a month earlier.

Amanda Bryden, head of mortgages at Halifax, said: "While this may feel like a subdued close to the housing market in 2025, overall activity levels were resilient over the last year and broadly in line with the pre-pandemic average.

"Various forces are poised to somewhat buoy the market heading into 2026. While December's monthly fall in prices was likely related to uncertainty in the latter part of the year, this should now be starting to unwind. Further, mortgage rates are already reducing following the latest Base Rate cut and there are an increasing number of lending options available for those borrowing at a higher loan-to-value.

"While affordability pressures persist, the house price to income ratio was at its lowest in over a decade in December, striking a positive note for those looking to purchase their first home.

"On this basis, and recognising the headwinds that may affect buying power - such as the slowing of wage inflation and flattening employment rates - we expect a modest rise in house prices during the year of between 1% and 3%."

In equity markets, Associated British Foods tumbled as it cut its profit outlook due to a weaker performances at its Primark retail chain and US foods operations in the 16 weeks to 3 January.

Tesco slumped as it said full-year earnings were expected to be at the top end of forecasts but reported a slowdown in underlying sales growth over the key Christmas selling season. Sainsbury's, which is due to update the market on Friday, also fell.

Experian lost ground as it said chairman Mike Rogers was planning to retire at the annual meeting in July, after nine years on the board.

Energy major Shell gushed lower after saying it expected to post a loss in its chemicals and products division in the fourth quarter, but left guidance for the rest of the business largely unchanged.

Greggs tanked as the bakery chain posted a rise in fourth-quarter sales but said it expects flat profits this year amid subdued consumer confidence.

On the upside, defence firm BAE Systems shot to the top of the FTSE 100 after Donald Trump said US defence spending should be boosted to $1.5tn in 2027 - a 50% increase from this year's budget - in "these very troubled and dangerous times". This followed his capture over the weekend of Venezuelan leader Nicolas Maduro.

Marks & Spencer rose as it left its full-year guidance unchanged after what it called "solid" Christmas trading.

Computacenter rallied as it announced the acquisition of AgreeYa, a professional services business focused on the US enterprise market and the assets of the associated business, AgreeYa India, for up to $120m.

Market Movers

FTSE 100 (UKX) 10,019.07 -0.29%
FTSE 250 (MCX) 22,763.28 -0.51%
techMARK (TASX) 5,839.60 0.21%

FTSE 100 - Risers

BAE Systems (BA.) 2,028.00p 5.30%
Coca-Cola HBC AG (CDI) (CCH) 3,874.00p 4.36%
Marks & Spencer Group (MKS) 337.00p 2.59%
NATWEST GROUP (NWG) 641.40p 1.42%
Aviva (AV.) 688.40p 1.38%
JD Sports Fashion (JD.) 84.04p 1.30%
Standard Chartered (STAN) 1,810.50p 1.15%
Lloyds Banking Group (LLOY) 99.92p 1.03%
Barclays (BARC) 484.35p 1.00%
Legal & General Group (LGEN) 264.60p 0.99%

FTSE 100 - Fallers

Associated British Foods (ABF) 1,912.00p -11.11%
Tesco (TSCO) 425.60p -5.97%
Mondi (MNDI) 885.80p -3.25%
Croda International (CRDA) 2,647.00p -2.90%
3i Group (III) 3,089.00p -2.89%
Ashtead Group (AHT) 5,316.00p -2.89%
Experian (EXPN) 3,348.00p -2.79%
ICG (ICG) 2,044.00p -2.67%
Barratt Redrow (BTRW) 374.90p -2.62%
Sainsbury (J) (SBRY) 328.80p -2.32%

FTSE 250 - Risers

Softcat (SCT) 1,459.00p 4.21%
Computacenter (CCC) 3,200.00p 3.69%
Oxford Biomedica (OXB) 752.00p 3.30%
Trustpilot Group (TRST) 181.70p 2.25%
Grainger (GRI) 194.80p 2.20%
Syncona Limited NPV (SYNC) 98.80p 2.07%
Endeavour Mining (EDV) 4,002.00p 1.94%
Hochschild Mining (HOC) 499.80p 1.92%
RTW Biotech Opportunities Ltd (RTW) 2.20p 1.85%
Wizz Air Holdings (WIZZ) 1,293.00p 1.81%

FTSE 250 - Fallers

Greggs (GRG) 1,598.00p -9.87%
Hays (HAS) 51.50p -5.68%
Pagegroup (PAGE) 227.80p -4.92%
Ceres Power Holdings (CWR) 228.60p -3.87%
Playtech (PTEC) 265.00p -3.11%
Ibstock (IBST) 133.00p -3.06%
Bridgepoint Group (Reg S) (BPT) 284.40p -2.94%
Tate & Lyle (TATE) 355.80p -2.68%
WPP (WPP) 331.10p -2.67%
Diversified Energy Company (DI) (DEC) 988.00p -2.56%