London midday: FTSE pares losses as oil dips below $100 a barrel

(Sharecast News) - London stocks had pared losses by midday on Friday as oil prices dipped back below $100 a barrel, having risen after the US and Iran exchanged fire in the vital Strait of Hormuz.

The FTSE 100 was down 0.2% at 10,253.40, while Brent crude was 0.1% lower at $99.99 a barrel.

Despite the strikes - which each side claimed had been initiated by the other - US president Donald Trump insisted the ceasefire was ongoing and that talks with Iran were going very well.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 started Friday on the back foot as local election results trickled in and tensions simmered in the Middle East.

"While officially the ceasefire between the US and Iran remains in place, an exchange of fire in the Strait of Hormuz has helped to extinguish some of the hope that a deal between the parties might be close.

"For now, the move higher in Brent crude oil prices is relatively modest and still substantially below last week's highs, suggesting commodity traders still see a chance for de-escalation in the region."

On home shores, results of the local elections rolled in, with major losses for Labour and gains for Reform.

Dan Coatsworth, head of markets at AJ Bell, said gilt yields have remained at elevated levels after Labour's setbacks.

"The 30-year gilt yield is a better measure of political sentiment than the usual 10-year benchmark rate, as the government typically issues long-term debt. The 30-year gilt held firm at 5.628%, having traded at 5.8% earlier this week versus 5% just three months ago.

"The election results have fuelled speculation that Keir Starmer might struggle to cling on as prime minister.

"Bond markets have been spooked by the prospect of political change as the obvious challengers, Angela Rayner and Andy Burnham, might push for greater government borrowing and spending, which could take gilt yields even higher."

Looking to the rest of the day, the non-farm payrolls report, unemployment rate and average earnings for April will be released at 1330 BST. Consensus expectations are for a 62,000 increase in non-farm payrolls and for the unemployment rate to remain steady at 4.3%.

"With ADP private payrolls coming in better than expected, the numbers could come in a little stronger," said Derren Nathan, head of equity research at Hargreaves Lansdown. "That's a pretty resilient outcome given the geopolitical backdrop. So far, AI is not proving to be the end of the jobs market as we know it, with skilled labour in particularly high demand. With inflationary concerns running high, a strong print could move expectations for rate cuts further out yet."

Elsewhere, data from Halifax showed that house prices ticked lower in April as geopolitical uncertainty weighed on consumer sentiment.

House prices edged down 0.1% last month, adding to March's 0.5% decline. The average property price now stands at £299,313. Annual growth slowed to 0.4% from 0.8% in March.

Amanda Bryden, head of mortgages at Halifax, said: "After a strong start to the year, recent global developments have added a greater degree of uncertainty to the outlook. In particular, higher energy prices have fed into inflation expectations, prompting markets to reassess the path for interest rates - a shift that has already pushed up borrowing costs for many buyers.

"This understandably leads to more caution among some households, with the cost-of-living once again front of mind and extra thought being given to planned property moves."

In equity markets, Intertek slid as it rejected Swedish private equity firm EQT's sweetened offer of £58 a share, saying it "significantly undervalues" the company and its future prospects, and that there was major execution risk given its conditional nature.

IAG fell as it warned that annual profits would be lower than previously expected due to rising fuel costs as a result of the Middle East conflict.

The profit warning came as the BA and Iberia owner hailed a "strong" first quarter, with operating profit up 77.3% to €351m and revenue 1.9% higher at €7.2bn amid continued solid demand for its network and brands.

Workspace was weaker after saying it had rejected a proposal by activist investor Saba Capital to wind down the company over a 12-month period to address the discount to net asset value.

The office space provider also said it had received a shareholder request from Saba - which owns a stake of about 18.2% - to make changes to the board at the annual general meeting in July. Saba is calling for the removal of five of the current non-executive directors and the appointment of four new non-executive directors. Adding pressure was a downgrade to 'underweight' from 'overweight' at Barclays.

Telecommunications provider Airtel Africa gained after full-year numbers, while Zigup - formerly Redde Northgate - rallied as Berenberg initiated coverage of the shares at 'buy'.

Market Movers

FTSE 100 (UKX) 10,253.40 -0.23%

FTSE 250 (MCX) 22,918.40 0.16%

techMARK (TASX) 5,901.84 -0.16%

FTSE 100 - Risers

JD Sports Fashion (JD.) 76.18p 4.22%

BT Group (BT.A) 229.35p 3.41%

NATWEST GROUP (NWG) 583.00p 2.03%

Lloyds Banking Group (LLOY) 99.68p 1.70%

Persimmon (PSN) 1,126.50p 1.62%

Kingfisher (KGF) 292.30p 1.60%

Land Securities Group (LAND) 595.00p 1.54%

Vodafone Group (VOD) 117.80p 1.51%

Severn Trent (SVT) 3,181.00p 1.47%

British Land Company (BLND) 390.30p 1.27%

FTSE 100 - Fallers

Intertek Group (ITRK) 4,840.00p -3.39%

Metlen Energy & Metals (MTLN) 37.05p -1.98%

Coca-Cola HBC AG (CDI) (CCH) 4,251.00p -1.83%

Babcock International Group (BAB) 1,081.50p -1.73%

Sainsbury (J) (SBRY) 314.10p -1.72%

Pershing Square Holdings Ltd NPV (PSH) 4,108.00p -1.63%

International Consolidated Airlines Group SA (CDI) (IAG) 390.00p -1.62%

Flutter Entertainment (DI) (FLTR) 7,446.00p -1.59%

Bunzl (BNZL) 2,396.00p -1.40%

Unilever (ULVR) 4,261.00p -1.19%

FTSE 250 - Risers

Zigup (ZIG) 422.00p 4.58%

AEP Plantations (AEP) 1,986.00p 3.43%

Ithaca Energy (ITH) 260.60p 3.00%

Ashmore Group (ASHM) 219.20p 2.53%

Vistry Group (VTY) 354.00p 2.43%

Pennon Group (PNN) 538.00p 2.38%

Great Portland Estates (GPE) 318.20p 2.19%

Softcat (SCT) 1,449.00p 2.19%

NCC Group (NCC) 140.80p 2.18%

Man Group (EMG) 267.40p 2.14%

FTSE 250 - Fallers

Schroder Asian Total Return Investment Company (ATR) 639.00p -4.91%

Trustpilot Group (TRST) 262.40p -3.10%

XP Power Ltd. (DI) (XPP) 1,852.00p -2.73%

Ceres Power Holdings (CWR) 730.00p -2.67%

Workspace Group (WKP) 342.80p -2.22%

Chemring Group (CHG) 496.00p -2.13%

Schroder Oriental Income Fund Ltd. (SOI) 418.00p -1.88%

RTW Biotech Opportunities Ltd (RTW) 2.14p -1.83%

QinetiQ Group (QQ.) 426.80p -1.55%

Energean (ENOG) 835.00p -1.53%