London pre-open: FTSE seen up amid US-Iran peace hopes; UK retail sales, borrowing in focus

(Sharecast News) - London stocks were set to rise at the open on Friday amid renewed hopes of a peace deal between the US and Iran.

The FTSE 100 was called to open around 0.4% higher.

Ipek Ozkardeskaya, senior analyst at Swissquote, said: "Yesterday morning in Europe, the news that Iran wanted enriched uranium to remain in Iran echoed negatively across markets, pushing oil prices and yields higher while sending equities lower. Some European indices indeed closed the day in the red, also due to a set of terrible-looking PMI numbers - which I will discuss shortly.

"The DAX lost 0.53%, while the CAC 40 fell 0.39%, swinging between its 50-DMA on the downside and 100-DMA on the upside, somewhat undecided on whether worsening activity could soften the European Central Bank's (ECB) rate hike expectations in response to an external shock.

"But as the session progressed, pessimism over Iran turned into optimism - optimism that the gap between the US and Iran may be narrowing. Some officials made very vague comments that met immediate positive reaction. You know the music.

"That helped pull oil prices lower, sending US crude below $100 per barrel and beneath its 50-DMA, easing pressure on yields and supporting US indices, which ended the session in positive territory unlike their European peers."

On home shores, investors will be digesting the latest data from the Office for National Statistics, which showed that retail sales slid in April.

Retail sales volumes fell 1.3% following a revised 0.6% increase the month before. This was the worst monthly drop since May 2025, when sales were down 1.4%, and much steeper than expectations for a 0.6% decline.

The ONS said fuel volumes fell in April as some retailers suggested that motorists were conserving fuel. This followed strong March growth, with retailers reporting that motorists stocked up as prices rose.

Separate data from the ONS showed that government borrowing was higher than expected in April.

Borrowing came in at £24.3bn last month, up £4.9bn on the same time a year earlier. It was also £3.4bn more than the £20.9bn forecast by the Office for Budget Responsibility.

ONS chief economist Grant Fitzner said: "Borrowing this month was substantially higher than in April last year and although receipts increased compared to with April 2025, this was more than offset by higher spending on benefits and other costs."

In corporate news, Softcat lifted its full-year profit outlook as it said it continued to perform well in the third quarter, delivering strong double-digit year-on-year growth in gross profit and underlying operating profit.

The company, which provides IT infrastructure technology and services, said growth remains broad-based with particular strength in corporate, supported by customer demand for AI-enabled infrastructure and continued pull forward of some orders due to memory shortages.

"The board is pleased with progress to date and now expects mid-teens growth in underlying operating profit for the full year, up from high single-digit previously," it said.

Games Workshop, the maker of Warhammer, said it expected annual core revenue to be not less than £625m, compared with fiscal 2025's £565m and licensing revenue of not less than £30m, against £52.5m last time.

Profit before tax is estimated to be at least £265m compared with £262.8m last year.

Automotive distributor Inchcape said it has agreed to buy Silver Star, the official distributor of Mercedes-Benz passenger vehicles and Daimler trucks and buses in Bulgaria, for an undisclosed sum.

Inchcape, which has operated in Bulgaria since 1996, said the acquisition will further scale its share of passenger vehicles in the market there, and expand its presence into the truck category.

Chief executive Duncan Tait said: "This acquisition is a clear example of our Accelerate+ strategy in action: selectively building scale in small to medium markets where we can create value for our OEM partners and customers. Silver Star will strengthen our Mercedes-Benz relationship, enable us to expand into the truck category in Bulgaria and materially increase our market presence."