LONDON MARKET EARLY CALL: FTSE 100 set to fall on Iran fears

(Alliance News) - Stocks in London are set to open lower on Friday, as investors digest the outcome of the US-China summit and the latest Westminster drama.

IG says futures indicate the FTSE 100 to open 85.3 points lower, 0.8%, at 10,287.63 on Friday. The index of London large-caps closed 0.5% higher at 10,372.93 on Thursday.

US President Trump said he made "fantastic trade deals" with China's Xi Jinping, as the pair met at final meetings of a superpower summit that according to the US leader has also reaped a Chinese offer to help open the Strait of Hormuz.

"We've made some fantastic trade deals, great for both countries," he said, as Xi accompanied him through the gardens of Zhongnanhai, a central leadership compound next to Beijing's Forbidden City.

On the topic of the war in Iran, the US president said Xi had effectively assured his counterpart that China was not preparing to militarily aid Tehran, which has essentially closed the Strait of Hormuz.

"He'd like to see the Hormuz Strait open, and said 'if I can be of any help whatsoever, I would like to help,'" Trump added.

Sterling was quoted at USD1.3354 early Friday, lower than USD1.3480 at the London equities close on Thursday. Against the euro, sterling fell to EUR1.1467 from EUR1.1549 a day prior.

The euro traded at USD1.1646 early Friday, lower than USD1.1677 late Thursday. Against the yen, the dollar was quoted at JPY158.58 versus JPY158.14.

Back in the UK, Greater Manchester Mayor Andy Burnham said he intends to stand for Labour in a by-election after a sitting MP offered to step aside to allow his return to Westminster and a potential challenge to Prime Minister Keir Starmer.

Burnham said he wanted to "bring the change we have brought to Greater Manchester to the whole of the UK and make politics work properly for people".

The move follows Labour MP Josh Simons announcing he would resign as MP for Makerfield so Burnham could contest the seat. According to the Press Association, Starmer is not expected to block Burnham from becoming Labour's candidate in the by-election.

In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.8%, the S&P 500 up 0.8% and the Nasdaq Composite up 0.9%.

In Asia on Friday, the Nikkei 225 index in Tokyo was down 1.9%.

Data from the Bank of Japan showed producer prices accelerated sharply in April. The corporate producer price index rose 2.3% month-on-month, up from 0.8% in March and well ahead of the FXStreet-cited consensus forecast of 0.7%. On an annual basis, producer prices climbed 4.9%, accelerating from 2.6% and beating expectations for a 3.0% increase.

In China, the Shanghai Composite was down 0.9%, while the Hang Seng index in Hong Kong fell 1.9%. The S&P/ASX 200 in Sydney was down 0.3%.

Brent oil was trading at USD107.57 a barrel early Friday, higher than USD104.92 late Thursday.

US Treasury Secretary Scott Bessent claimed Iran's oil production had effectively come to a standstill due to the ongoing US blockade of Iranian ports.

Speaking to CNBC, Bessent said there had been "no loadings in the past three days" at Kharg Island, a major hub for Iranian crude exports. He added that storage facilities were nearing capacity as tankers remained unable to enter or leave Iranian ports.

The US blockade was imposed in response to Tehran's closure of the Strait of Hormuz, a key artery for global oil trade. Bessent warned that if Iran is forced to shut oil wells because storage capacity is exhausted, the country could face lasting damage to its energy infrastructure.

Gold was quoted at USD4,563.79 an ounce early Friday, lower than USD4,688.75 on Thursday.

In Friday's corporate calendar, Grafton Group and Unite Group both issue trading statements.

In the economic calendar on Friday, Switzerland industrial production, Ireland trade balance, Canada manufacturing sales, the New York Empire State manufacturing index and US industrial production.

By Eva Castanedo, Alliance News reporter

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