LONDON MARKET MIDDAY: FTSE 100 rises but downgrades harm retail stocks

Fri, 29th May 2026 12:19

(Alliance News) - Stock prices in London were higher at midday on Friday, as investors awaited further news from the Middle East, while three FTSE 250 retail stocks were hit by broker downgrades.

The FTSE 100 index was up 26.99 points, 0.3%, at 10,452.95. The FTSE 250 was up 197.76 points, 0.9%, at 23,522.17, and the AIM all-share was up 7.88 points, 1.0%, at 821.51.

The Cboe UK 100 was up 0.2% at 1,039.07, the Cboe UK 250 was up 0.7% at 20,351.81, and the Cboe small companies was up 0.5% at 18,860.34.

In European equities on Friday, the CAC 40 in Paris was 0.8% higher, while the DAX 40 in Frankfurt was up 0.2%.

Sterling was at USD1.3419 at midday on Friday, down from USD1.3435 at the London equities close on Thursday. Against the euro, sterling was down at EUR1.1520 from EUR1.1530.

The governor of the Bank of England has said that allowing inflation to remain above target levels for a period is "appropriate" in the face of uncertainty and weakness in the economy.

Andrew Bailey told an audience in Reykjavik, Iceland, that reacting too early to inflation concerns "may generate undesirable volatility".

He said: "Given the context of softness in the real economy and uncertainty around the scale and duration of the shock, tolerating temporarily above target inflation to provide some support for the real economy is an appropriate way to approach the trade-off.

"But that tolerance would weaken if signs of second-round effects begin to emerge."

The government has given the central bank a target rate of 2% for consumer price inflation.

The euro was lower at USD1.1644 from USD1.1653. Against the yen, the dollar was a little higher at JPY159.28 versus JPY159.23.

"The FTSE 100 was steady on Friday as global markets continue to try and unpick the latest movements in the Middle East," said AJ Bell analyst Russ Mould.

"Reports that Tehran and Washington have agreed a framework for a 60-day extension to the ceasefire, which would facilitate the reopening of the Strait of Hormuz and enable fresh negotiations over Iran's nuclear programme, have engendered some positivity. But there remain conflicting noises about whether the deal will get sign-off from President Trump."

Under the reported deal Iran, which has been attempting to control maritime traffic through the Strait of Hormuz and charge vessels for passage, would reopen the gateway to the Gulf.

In response, Brent crude for July delivery was trading lower at USD91.79 a barrel on Friday from USD94.57 on Thursday.

AJ Bell analyst Russ Mould added: "Retail stocks were firmly on the back foot in London to reflect ongoing concern about the pressures facing household budgets in the UK and the knock-on effect on consumer spending."

Deutsche Bank Research downgraded their ratings for Dunelm, Currys and Wickes. The price for the three stocks sank 2.3%, 1.7% and 1.3% respectively.

Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.2%, the S&P 500 index 0.1% higher, and the Nasdaq Composite to gain 0.1%.

The yield on the US 10-year Treasury slimmed slightly to 4.45% on Friday from 4.46% on Thursday. The yield on the US 30-year Treasury narrowed a little to 4.98% from 4.99%.

France's real GDP decreased by 0.1% in the first quarter of 2026 from the fourth quarter of 2025, after growing 0.2% in the fourth quarter from the third, Insee reported. This was worse than the flash reading, which had estimated the size of the French economy was entirely unchanged in the first quarter.

Consumption of goods dropped 0.7% on quarter after growing 0.5% the previous quarter, which Insee attributed to "the decline in energy consumption". Consumption of services maintained the same 0.2% rate of growth reported the quarter prior.

Economists said the figures do not bode well for French growth this year, with some already expecting a further GDP slowdown in the current quarter. That would push France into a technical recession of two straight quarters of contraction.

Back in London, Ocado shares surged 11% after it announced a deal to develop supermarket Asda's online business across the UK with the Ocado Smart Platform.

Leeds-based Asda is one of the UK's largest grocers, with total sales in 2025 of more than GBP21 billion, and operations across 1,100 stores nationwide.

Ocado said the focus of the partnership will be to quickly replace and upgrade Asda's existing e-commerce infrastructure with Ocado's platform, with the aim to go live in early 2027.

AJ Bell analyst Russ Mould said: "It still feels a world away from the idea Ocado could become a global leader, licensing its platform to help supermarkets around the world set up their own web-based solutions, a story which really captured the imagination during the pandemic. Particularly given this deal follows a major setback with its big US partner Kroger last year.

"Despite a healthy bump today, the shares still sit more than 90% below the all-time highs achieved in 2020 when excitement around the stock and the potential for global growth hit fever pitch."

Among small caps, shares in Georgina Energy advanced 13%.

The onshore helium and hydrogen explorer said its pretax loss narrowed to GBP2.8 million in the 12 months to the end of January from GBP5.4 million in the nine-month period to the end of January 2025.

Administrative costs in financial 2026 were GBP1.7 million, compared to GBP953,263 in the previous nine-month period.

"The 12 month period and the beginning of 2026 have been extremely busy for the company and I'm pleased with the progress we are making on both our key assets of Hussar and Mt Winter," said Chief Executive Officer Anthony Hamilton.

Gold was higher at USD4,534.32 an ounce at Friday lunchtime from USD4,479.57 late Thursday.

Still to come on Friday's economic calendar is German inflation data, GDP figures from Canada, plus the Chicago PMI.

By Michael Hennessey, Alliance News reporter

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