The FTSE 100 ended the week on the front foot as Iran claimed a deal with the US has “never been closer”, while investors were glued to dealing screens as trading in SpaceX kicked off.
The FTSE 100 closed up 167.84 points, or 1.6%, at 10,471.72. The FTSE 250 ended up 355.07 points, 1.6%, at 23,325.71, while the AIM All-Share shot up 16.37 points, 2.1%, to 787.33.
For the week, the FTSE 100 rose 1.0%, the FTSE 250 gained 1.2% but the AIM-All Share fell 1.0%.
“Investors were in a buoyant mood as hopes of a peace deal between the US and Iran were revived, having seemingly dropped off the table earlier in the week,” said Dan Coatsworth, head of markets at AJ Bell.
“Whether momentum can be sustained depends on positive noises about a resolution translating into something more solid in the coming days,” he added.
Late Thursday, US President Donald Trump said he had called off “very hard” strikes on Iran that had been due to take place overnight and claimed a deal had been agreed.
He added that Iran’s supreme leader had approved the text and that the time and place of the signing would be “announced shortly”.
On Friday, Iranian Foreign Minister Abbas Araghchi said the US and Iran have “never been closer” to a deal on ending the war in the Middle East.
“The Islamabad Memorandum of Understanding has never been closer,” Mr Araghchi wrote on X, referring to the Pakistani capital which hosted previous US-Iran talks.
“Pending its finalisation, the media should refrain from entering speculation about its content,” he added, after purported details of the accord were published by Iranian media, which were subsequently slammed by Mr Trump.
White House officials said Iran has agreed to dismantle its nuclear programme and destroy nuclear material under the deal with the US.
Tehran also agreed to open the Strait of Hormuz and will not receive any frozen funds until they honour their commitments under the “performance-based deal”, the senior administration official said.
In response, Brent crude for August delivery traded sharply lower at 87.00 dollars a barrel on Friday, from 92.95 dollars at the time of the equities close in London on Thursday.
In New York, the Dow Jones Industrial Average was up 1.1%, the S&P 500 was 0.8% higher and the Nasdaq Composite rose 0.7%.
Attention across the pond was squarely focused on the SpaceX initial public offer, the biggest in history.
Elon Musk’s reusable rocket company is raising 75 billion dollars, selling 555.6 million shares for 135 dollars a piece. The deal values SpaceX at 1.77 trillion dollars (£1.33 trillion), making it the seventh most-valuable US company, ahead of Tesla, Mr Musk’s electric vehicle maker.
Shares were trading at around 162 dollars per share as dealing began around the time of London’s close, a sharp premium to the IPO price.
Kathleen Brooks, research director at XTB said there is “so much enthusiasm for SpaceX right now, that it is hard to see the shares slipping any time soon”.
“It is easy to be bearish about SpaceX, the numbers are incredibly optimistic, however, this is not the story of the day,” she said.
“The IPO is a roaring success, and SpaceX will change the landscape of US stock markets. It will also shift the AI trade from chip socks to imagining an AI-infused reality. The real question that an IPO of this size asks: is SpaceX and the AI trade too big to fail?”
In European equity markets on Friday, the CAC 40 in Paris ended up 1.8%, as did the DAX 40 in Frankfurt.
The euro traded higher against the greenback, at 1.1583 dollars on Friday against 1.1522 dollars on Thursday. Against the yen, the dollar was trading at 160.18 yen, down from 160.48 yen a day earlier.
Back in London, the impact of the Middle East crisis was seen as the UK economy suffered a slight but unsurprising decline in April.
The UK economy contracted 0.1% in April, in line with forecasts, according to data from the Office for National Statistics (ONS) on Friday.
The reading was a sign that the conflict is “slowly but surely catching up with the UK”, Deutsche Bank analyst Sanjay Raja said.
The pound traded at 1.3422 dollars on Friday afternoon, up from 1.3342 dollars on Thursday. Against the euro, sterling firmed to 1.1587 euros from 1.1578 euros on Thursday.
The yield on the US 10-year Treasury eased to 4.48% on Friday from 4.52% on Thursday. The yield on the US 30-year Treasury narrowed to 4.97% from 5.00% on Thursday.
Gold traded at 4,219.28 dollars an ounce on Friday, higher from 4,079.75 dollars on Thursday.
Back in London, oil majors BP and Shell unsurprisingly missed out on the market rally as the oil price fell, dropping 2.0% and 1.7% respectively.
In addition, Shell announced a pause in its three billion-dollar (£2.2 billion) share buyback programme until mid-July. This reflects securities law requirements that apply to Shell relating to the ARC Resources takeover.
Rising metals prices saw gains for Antofagasta, Anglo American and Fresnillo, up 4.9%, 5.2% and 4.5% respectively. While British Airways owner International Consolidated Airlines climbed 7.1% on hopes of lower fuel costs and a pick-up in travel.
Scottish Mortgage Investment Trust, an investor in SpaceX, saw its shares marked up 1.7%, while Rolls Royce was lifted 4.4% on hopes for a US-Iran peace deal and as Berenberg upgraded to ‘buy’ from ‘hold’.
The biggest risers on the FTSE 100 were International Consolidated Airlines Group, up 28.8p at 436.2p, Lion Finance, up 620.0p at 11,050.0p, Barclays, up 23.90p at 472.85p, Anglo American, up 198.0p at 4,002.0p and Endeavour Mining, up 181.0p at 3,830.0p.
The biggest fallers on the FTSE 100 were BP, down 10.8p at 534.5p, Shell, down 55.5p at 3,220.5p, BAE Systems, down 31.5p at 1,911.0p, Centrica, down 1.95p at 185.8p and AstraZeneca, down 116.0p at 13,462.0p.
Next week’s global economic calendar sees interest rate calls in the US, UK, Australia, Japan and Switzerland among others. UK inflation and unemployment data will also be released.
Monday’s local corporate calendar has full-year results from broker Peel Hunt. Later in the week grocer Tesco and Premier Inn owner Whitbread reports first quarter trading updates.
Contributed by Alliance News
