The FTSE 100 ended the week on a positive note, driven by renewed hopes for a peace deal between the US and Iran, while investors closely watched the historic SpaceX initial public offering (IPO).
FTSE Performance
The FTSE 100 closed up 167.84 points, or 1.6%, at 10,471.72. The FTSE 250 rose 355.07 points, also 1.6%, to 23,325.71, and the AIM All-Share gained 16.37 points, or 2.1%, to 787.33. For the week, the FTSE 100 advanced 1.0%, the FTSE 250 climbed 1.2%, but the AIM All-Share fell 1.0%.
Dan Coatsworth, head of markets at AJ Bell, commented: "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. Whether momentum can be sustained depends on positive noises about a resolution translating into something more solid in the coming days."
US-Iran Deal Developments
Late Thursday, US President Donald Trump stated he had called off "very hard" strikes on Iran that were scheduled overnight and claimed a deal had been reached. He added that Iran's supreme leader had approved the text, and the signing time and place would be "announced shortly."
On Friday, Iranian Foreign Minister Abbas Araghchi said the US and Iran have "never been closer" to a deal to end the Middle East war. "The Islamabad Memorandum of Understanding has never been closer," he wrote on X, referring to the Pakistani capital that hosted previous US-Iran talks. He urged media to refrain from speculation about its content pending finalisation.
White House officials stated that under the deal, Iran has agreed to dismantle its nuclear programme and destroy nuclear material. Tehran also agreed to open the Strait of Hormuz and will not receive frozen funds until it honours commitments under the "performance-based deal."
In response, Brent crude for August delivery traded sharply lower at $87.00 a barrel on Friday, down from $92.95 at the London equities close on Thursday.
SpaceX IPO
In New York, the Dow Jones Industrial Average rose 1.1%, the S&P 500 gained 0.8%, and the Nasdaq Composite added 0.7%. Attention was squarely on the SpaceX IPO, the largest in history. Elon Musk's reusable rocket company is raising $75 billion, selling 555.6 million shares at $135 each. The deal values SpaceX at $1.77 trillion (£1.33 trillion), making it the seventh most valuable US company, ahead of Tesla.
Shares traded at around $162 per share as dealing began near 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. 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 stocks to imagining an AI-infused reality. The real question an IPO of this size asks: is SpaceX and the AI trade too big to fail?"
European and Currency Markets
In Europe, the CAC 40 in Paris and the DAX 40 in Frankfurt both ended up 1.8%. The euro traded higher against the dollar at $1.1583 on Friday, up from $1.1522 on Thursday. Against the yen, the dollar was at 160.18 yen, down from 160.48 yen a day earlier.
UK Economy
Back in London, the UK economy contracted 0.1% in April, in line with forecasts, according to data from the Office for National Statistics (ONS) on Friday. Deutsche Bank analyst Sanjay Raja said the reading was a sign that the Middle East crisis is "slowly but surely catching up with the UK."
The pound traded at $1.3422 on Friday afternoon, up from $1.3342 on Thursday. Against the euro, sterling firmed to €1.1587 from €1.1578 on Thursday. The yield on the US 10-year Treasury eased to 4.48% on Friday from 4.52% on Thursday, while the 30-year yield narrowed to 4.97% from 5.00%. Gold traded at $4,219.28 an ounce on Friday, higher from $4,079.75 on Thursday.
Stock Movers
Oil majors BP and Shell missed out on the market rally as the oil price fell, dropping 2.0% and 1.7% respectively. Shell also announced a pause in its $3 billion (£2.2 billion) share buyback programme until mid-July due to securities law requirements related to the ARC Resources takeover.
Rising metals prices boosted Antofagasta, Anglo American, and Fresnillo, which gained 4.9%, 5.2%, and 4.5% respectively. British Airways owner International Consolidated Airlines climbed 7.1% on hopes of lower fuel costs and increased travel. Scottish Mortgage Investment Trust, an investor in SpaceX, saw its shares rise 1.7%, while Rolls Royce gained 4.4% on hopes for a US-Iran peace deal and an upgrade from Berenberg to 'buy' from 'hold'.
The biggest risers on the FTSE 100 were International Consolidated Airlines Group (up 28.8p to 436.2p), Lion Finance (up 620.0p to 11,050.0p), Barclays (up 23.90p to 472.85p), Anglo American (up 198.0p to 4,002.0p), and Endeavour Mining (up 181.0p to 3,830.0p). The biggest fallers were BP (down 10.8p to 534.5p), Shell (down 55.5p to 3,220.5p), BAE Systems (down 31.5p to 1,911.0p), Centrica (down 1.95p to 185.8p), and AstraZeneca (down 116.0p to 13,462.0p).
Outlook
Next week's global economic calendar features interest rate decisions in the US, UK, Australia, Japan, and Switzerland, among others. UK inflation and unemployment data will also be released. Monday's local corporate calendar includes full-year results from broker Peel Hunt, while grocer Tesco and Premier Inn owner Whitbread will report first-quarter trading updates later in the week.
Contributed by Alliance News
