The FTSE 100 posted modest gains on Friday, rising 0.2% to 10,466.26, while the FTSE 250 outpaced it with a 1.0% climb to 23,167.47.
Stocks gained encouragement from lower oil prices as investors weighed the latest developments in the Middle East. US Secretary of State Marco Rubio said Thursday there were “some good signs” in negotiations between the US and Iran, but cautioned against being “overly optimistic”.
Presidential adviser Anwar Gargash urged Tehran not to overplay its hand in the stop-start negotiations during the Middle East war’s fragile ceasefire, warning that Iranian officials have a history of missing opportunities through miscalculation.
The calmer rhetoric proved enough to ease energy markets. Brent crude for July delivery fell to $104.22 a barrel on Friday, down from $107.98 at Thursday’s London close, providing relief to markets after weeks of geopolitical jitters.
FTSE 250 delivers Main Movers
The mid-cap index stole the show, with three stocks posting strong gains. Ceres Power close up 16% as UBS raised its share price target by 70% to 970p from 570p, signalling confidence in the thermal processing firm’s prospects.
Bodycote soared 16% after becoming the latest UK-listed company to receive bid interest, with Apollo Management offering 885 pence per share in cash – a takeover interest that underscores continued appetite for quality UK industrial assets.
Softcat surged 13% after the technology firm raised its full-year profit growth expectations and said it is “encouraged” by business momentum. The company reported strong double-digit growth on-year in both gross profit and underlying operating profit during its third quarter ended April 30.
Games Workshop powers the FTSE 100
Games Workshop delivered the standout performance on the blue-chip index, up 7.9% on a positive trading update. The Warhammer miniatures maker said annual core revenue would be at least £625 million, compared with fiscal 2025’s £565 million – a near 11% increase. Pre-tax profit is estimated at least £265 million, versus £262.8 million last year, maintaining momentum despite economic headwinds and the impact of US tariff uncertainty the company flagged earlier.
On the broader FTSE 100, Croda International rose 4.3% after JPMorgan reiterated an ‘overweight’ rating, while 3i Group climbed 2.7% as Chief Executive Simon Borrows bought a chunk of shares worth £1.1 million in total. Cooling bond yields, as expectations for fewer interest rate hikes gained ground, boosted housebuilder Persimmon, up 3.0%.
UK economic data muddles the picture
Investors also had to digest mixed UK economic data which tempered some of the day’s optimism. The Office for National Statistics said UK public sector borrowing in April totalled £24.34 billion, rising sharply from £11.48 billion in March and well above the £19.46 billion recorded a year prior. The April figure was £3.4 billion more than the £20.9 billion forecast by the Office for Budget Responsibility, driven primarily by higher spending.
However, the longer-term picture looks healthier. Borrowing in the financial year to March was provisionally estimated at £129.0 billion, down 15% on the year and £3.7 billion below the OBR’s forecast. Borrowing in the year to March stood at 4.2% of gross domestic product, the lowest figure since financial 2020, when it was 2.6%. The ONS reduced its forecast for borrowing in the year to March by £3.0 billion from its last estimate.
Retail sales data also disappointed as sales volumes fell 1.3% in April from March, worse than the 0.6% decline expected. March sales had been revised down to 0.6% from an initially reported 0.7% climb. The weaker-than-expected retail figures suggest consumers remain cautious amid ongoing economic uncertainty.
Continental Europe keeps pace
In European equity markets on Friday, the CAC 40 in Paris ended up 0.4%, and the DAX 40 in Frankfurt jumped 1.2%, outpacing London’s modest gains.
German business morale unexpectedly increased in May, a survey showed Friday, raising hopes that Europe’s biggest economy is weathering the Iran war energy shock better than feared.
The Ifo institute’s confidence barometer rose to 84.9 points from 84.5 in April, the first time it has gone up since the start of the Mideast conflict and confounding analyst expectations for a slight decrease.
Wall Street opens to modest gains
In New York, the S&P 500 gained 0.4%, and the Dow Jones Industrial Average rose another 0.6% after reaching an all-time high on Thursday. The tech-heavy Nasdaq Composite climbed 0.2%.
Financial markets in the UK and the US are closed on Monday.