Blue-chip stocks in London outperformed their European and US peers on Friday but closed marginally lower as oil prices rose once again amid little sign of progress towards ending the Iran war.
“The simple fact is that sentiment is likely to remain negative as long as the Strait of Hormuz remains unsafe for shipping and controlled by Iran,” said David Morrison, senior market analyst at Trade Nation.
The FTSE 100 closed down just 4.82 points at 9,967.35. The FTSE 250 closed down 331.32 points, or 1.6%, at 20,964.75, and the AIM All-Share closed down 13.43 points, or 1.9%, at 705.63.
For the week, the FTSE 100 rose 0.5%, the FTSE 250 fell 1.8% and the AIM All-Share Index fell 1.7%.
On Thursday, US President Donald Trump extended by 10 days the deadline for Tehran to open the Strait of Hormuz or face the destruction of its energy assets.
But with Iran maintaining its control over the Strait, Trump's announcement failed to lift market sentiment.
“Traders are now dismissing the daily stream of incoherent White House releases and press conferences as the war rages on,” said Kathleen Brooks, director of research at XTB.
“Investors are faced with the facts: the Strait of Hormuz is effectively closed and there appears to be no real end in sight to the war.”
Trump has insisted that Iran wanted to “make a deal” to end the war raging in the region, but the Iranian side has indicated that it will not cease retaliatory attacks against Israel and targets throughout the Gulf.
Kuwait said Friday that its main commercial port was damaged in a drone attack.
Iran's Tasnim news agency said the country had responded to Washington's 15-point plan to end the war and was awaiting a response.
Reports also suggested that the United States is considering sending up to 10,000 additional troops to the Middle East, fueling speculation that Washington could be preparing for a possible ground operation in Iran.
The Wall Street Journal reported that the move would provide Trump with “more military options.”
Amid the stagnation, the upward trajectory of the oil price resumed.
Brent crude oil rose to $111.63 a barrel on Friday afternoon, up from $108.80 on Thursday.
In European equities on Friday, the CAC 40 in Paris closed down 0.9%, while the DAX 40 in Frankfurt closed down 1.4%.
“Trump's 10-day Taco (Trump always chickens out) has had a less profound impact compared to Monday's five-day respite, with stocks losing ground in Europe despite the president's decision to once again postpone attacks on key energy infrastructure. Instead, there is real concern that we could see an escalation through boots on the ground,” said Joshua Mahony of Scope Markets.
Stocks in New York were down. The Dow Jones Industrial Average was down 1.1%, the S&P 500 index was down 1.0% and the Nasdaq Composite was down 1.4%.
The 10-year US Treasury yield widened to 4.42% on Friday from 4.40% on Thursday. The 30-year US Treasury yield stretched from 4.94% to 4.95%.
The pound fell to $1.3288 on Friday afternoon from $1.3338 at the close of trading on Thursday. Against the euro, sterling fell to 1.1554 euros from 1.1563 euros the previous day.
The euro fell against the dollar to $1.1521 from $1.1534. Against the Japanese yen, the dollar was trading higher at 160.10 yen against 159.65 yen.
Supporting the FTSE 100, AstraZeneca rose 3.4% after reporting positive results from phase three of its chronic obstructive pulmonary disease treatment, tozorakimab.
The company said the drug achieved “significant and highly clinically meaningful” reductions in exacerbations in two replicate trials, Oberon and Titania.
Bank of America said the data was a “pleasant surprise” after failed trials at Roche and Sanofi with similar drugs.
Cambridge-based AstraZeneca is the most valuable company in the FTSE 100, worth around £223bn.
The company expects peak tozorakimab sales of $3 billion to $5 billion, while Visible Alpha's current consensus is $1.2 billion.
3i rose 1.0%, after falling 18% on Thursday amid disappointing like-for-like growth at its main investment, Dutch discount retailer Action.
JPMorgan said lower guidance for flat margins and lower comparable sales at Action “than we expected, was disappointing.”
However, JPM said Action remains a “leading compound growth story” and “3i now offers a cheap way in.”
Elsewhere, rising gold prices boosted Fresnillo and Endeavor Mining, with gains of 0.6% and 1.9% respectively.
Gold rose to $4,517.90 an ounce on Friday, up from $4,383.70 at the same time on Thursday.
NatWest rose 0.9% as Deutsche Bank raised its share price target to 840p from 730p.
“In our view, NatWest has unfairly downgraded its rating,” said analyst Robert Noble.
In the debt column, Metlen Energy fell the most, with a drop of 8.6%.
The Athens-based energy and metals company said auditors PricewaterhouseCoopers have requested more time to complete work on its 2025 financial statements, its first as a company dual-listed in London and Athens.
The group now expects to publish its results on April 9, a delay of nine days, and reiterated its forecasts for earnings before interest, tax, depreciation and amortization of around £750 million.
Housebuilders were again under pressure. Bank of America cut price targets by 20% across the sector and reduced pre-tax earnings forecasts by 7% between 2026 and 2028, with sector earnings per share expectations now 6% below consensus.
Barratt Redrow fell 4.7%, Persimmon 3.9% and Taylor Wimpey 1.7%.
The biggest risers on the FTSE 100 were: AstraZeneca, up 472.0p to 14,302.0p; Endeavor Mining, up 80.0p to 4,262.0p; Rio Tinto, up 115.0p to 6,545.0p; Reckitt Benckiser, rose 90.0p to 5,164.0p; and Glencore, up 6.4p to 538.4p.
The biggest fallers on the FTSE 100 were: Metlen Energy & Metals, down 3.0p to 31.75p; Barratt Redrow, down 12.6p to 255.7p; Babcock International, down 57.0p to 1,155.0p; Khaki, down 43.0p to 1,075.0p; and Autotrader, down 17.5p to 447.3p.
Monday's global economic calendar has UK mortgage approvals data at 7am BST. German and Italian inflation figures will also be published, along with the Dallas Federal Reserve manufacturing index in the United States.
Monday's local corporate calendar includes full-year results from Artisanal Spirits, Aoti and RTW Biotech.
In Europe, daylight saving time begins on Sunday and clocks are moved forward one hour.
Contributed by Alliance News
