The FTSE 100 ended the week on the back foot as the crisis in the Middle East remained deadlocked.
The FTSE 100 closed down 77.93 points, 0.8%, at 10,379.08. The FTSE 250 ended down 181.71 points, 0.8%, at 22,582.81, while the AIM All-Share fell 5.73 points, 0.7%, to 796.40.
For the week, the FTSE 100 fell 2.7%, the FTSE 250 also declined 2.7% and the AIM All-Share dipped 1.7%.
The oil price continued to tick higher amid few signs of a breakthrough in the Middle East crisis.
AFP reported that Iranian foreign minister Abbas Araghchi is expected to arrive in Islamabad on Friday night, citing an official source in Pakistan, without providing details about who he was likely to meet.
The Pakistan capital has been gearing up for an anticipated second round of talks between the US and Iran, but it was not clear whether Mr Araghchi and the delegation accompanying him would meet any US officials to discuss the Middle East war.
The BBC reported that the suggestion coming from Iran is that these are bilateral talks with Pakistan, not meeting the US.
Writing on X, Mr Araghchi said his trip to Islamabad is to “closely co-ordinate with our partners on bilateral matters and consult on regional developments”.
US defence secretary Pete Hegseth said Iran has a chance to “make a good, wise deal”, adding that the US naval blockade of Iranian ports “is growing and going global”.
Mr Hegseth said the US is not “anxious” to make a deal, and “the ball is in [Iran’s] court”.
Brent oil traded at 105.78 dollars a barrel on Friday afternoon, compared with 103.25 dollars at the time of the equities close in London on Thursday.
In European equities on Friday, the CAC 40 in Paris ended down 0.8%, and the DAX 40 in Frankfurt ended 0.1% lower.
The mood was brighter in the US. In New York, the Dow Jones Industrial Average was down 0.4%, but the S&P 500 was 0.5% higher and the Nasdaq Composite 1.2% to the good.
David Morrison, senior market analyst at Trade Nation, explained the war in the Gulf is hitting Europe and the UK harder than the US.
“The former are reliant on imported energy in a way the US isn’t. While the US still must deal with higher crude oil prices, it has few worries over supplies drying up,” he pointed out.
On Wall Street, Intel was the star of the show soaring 23% after better-than-expected first quarter results and guidance, reporting “unprecedented” demand for its chips.
The yield on the US 10-year Treasury stretched to 4.32% on Friday from 4.29% on Thursday. The yield on the US 30-year Treasury widened to 4.92% from 4.89%.
The pound eased to 1.3497 dollars on Friday afternoon from 1.3500 dollars on Thursday. Against the euro, sterling fell to 1.1532 euros from 1.1551 euros.
In the UK, retail sales increased faster than expected in March as fuel sales soared 6.1% amid surging oil prices.
According to the Office for National Statistics, the volume of retail sales rose by 0.7% in March, against market consensus for no growth.
Total retail sales, excluding automotive fuel, rose by 0.2% on-month, in line with FXStreet-cited expectations.
Danni Hewson, AJ Bell head of financial analysis, explained the figures show rising petrol and diesel prices are “eating into household budgets”.
“People can only spend a pound once and if they’re choosing to shell out more than normal on fuel, they’ll have less to spend on other purchases,” she explained.
A separate report showed UK firms think food inflation could jump as high as 7% this year.
According to a Bank of England survey the Middle East conflict has “eroded” confidence that the UK economy will improve later this year.
The Decision Maker Panel survey showed that firms expected to increase their prices by 3.8% over the next 12 months, according to data for the three months to April.
This is 0.3 percentage points higher than predicted over the three months to March.
Meanwhile, the Bank of England’s deputy governor, Sarah Breeden, told the BBC on Friday the the UK central bank expects stock markets around the world to fall as share prices do not reflect the many risks facing the global economy.
Ms Breeden, who is also the Bank’s head of financial stability, said: “There’s a lot of risk out there and yet asset prices are at all-time highs. We expect there will be an adjustment at some point.”
The euro traded lower against the greenback, falling to 1.1703 dollars on Friday from 1.1708 dollars on Thursday. Against the yen, the dollar was trading at 159.55 yen, from 159.50 yen.
On the FTSE 100, packaging firm Mondi slumped 11% as it missed profit forecasts in the first quarter.
The Weybridge-based packaging firm on Friday said underlying earnings before interest, taxes, depreciation and amortisation, including forestry fair value, fell 27% to 212 million euros for the first quarter that ended March 31, from 290 million euros a year earlier.
JD Sports Fashion fell 1.9% as the Financial Times said a boardroom rift sparked the departure of chairman Andrew Higginson this week.
The FT reported that Mr Higginson quit as chairman of JD Sports after pushing for chief executive Regis Schultz to be ousted and failing to win unanimous backing for the move.
But JD Sports told Alliance News that Mr Schultz has the “continued support” of its board.
A JD Group spokesperson said: “It was mutually agreed between Andy and the board that this is the right time for a change of chair; there has been no disagreement about the board’s continued support for the CEO. The board is grateful for the valuable role that Andy has played during his tenure at the business.”
Airlines headed south amid the higher oil price and fears over jet fuel supplies.
Wizz Air fell 6.0%, easyJet 2.3% and British Airways owner IAG 1.4%.
Gold traded at 4,718.34 dollars an ounce on Friday, down from 4,731.39 dollars at the same time on Thursday.
The biggest risers on the FTSE 100 were British American Tobacco, up 96.00p at 4,302.00p, Intercontinental Hotels Group, up 3.10p at 146.00p, London Stock Exchange Group, up 180.00p at 9,992.00p, Sage Group, up 14.60p at 902.80p and Marks & Spencer, up 5.35p at 347.00p.
The biggest fallers on the FTSE 100 were Mondi, down 93.60p at 748.20p, Babcock International, down 54.50p at 1,131.50p, Antofagasta, down 145.00p at 3,686.00p, AstraZeneca, down 536.00p at 13,956.00p and JD Sports Fashion, down 2.12p at 69.94p.
Monday’s global economic calendar has German consumer confidence data. Later in the week, interest rate decisions are due in the US, Europe, UK and Japan. Inflation prints will be released in Australia and for the euro area.
Next week’s local corporate calendar sees first quarter results from oil majors BP and Shell, pharmaceutical firms GSK and AstraZeneca and banks Barclays, NatWest and Lloyds.
Contributed by Alliance News
