(Sharecast News) - UK stocks finished lower for the third straight session on Friday as sentiment was dampened by disappointing economic growth figures at home and abroad, and another rise in the price of oil as the war between the US and Iran raged on.
Despite a brief spell in positive territory just after lunchtime, the FTSE 100 slipped back into the red to finish 0.4% lower at 10,261.15, with weakness in the heavyweight banking and mining sectors providing a drag.
"News that the Pentagon is sending a 2,500 Marines expeditionary unit to the Middle East weighed on stocks later in the day," said Axel Rudolph, chief technical analyst at IG.
Energy prices remained under pressure on Friday, despite the US temporarily lifting sanctions on the purchase of Russian oil supplies stranded at sea.
Global energy prices have soared since the US attacked Iran. As hostilities mount across the region, the Strait of Hormuz - a vital passage in the global supply of oil - has become too dangerous to pass. Around a fifth of the world's supply is normally transported through the narrow waterway between Iran and Saudi Arabia.
As a result, tankers have been left stranded and oil prices have rocketed. The International Energy Agency, which this week released an unprecedented 400m barrels of emergency stockpiles, warned that global crude supplies will hit their lowest level in four years this month.
Brent was 1.2% higher at $101.63 a barrel by the close in London, finishing above the $100 mark for the second straight day - it has not settled above this mark since Russia began its assault on Ukraine in 2022.
GDP data disappoints
In economic news, the Office for National Statistics revealed that the UK economy stalled in January, just weeks before war in the Middle East sent global energy prices soaring. GDP was unchanged in January, down on December's 0.1% uptick and below expectations for growth of 0.2%.
The Bank of England's Monetary Policy Committee meets next week and had been widely expected to trim interest rates to help bolster anaemic economic growth. However, the surge in energy price since the end of February means analysts now expect the cost of borrowing to be left on hold at 3.75%.
In the US, the second estimate of fourth-quarter GDP was revised to show an annualised increase of just 0.7%, well below the 1.4% flash estimate released three weeks ago. Analysts had expected the follow-up numbers to be unchanged, following the 4.4% growth registered in the third quarter.
Financial services gain, banks fall
Legal & General was among the best performers on the FTSE 100, as the stock attempted to recover after the financial services group underwhelmed with full-year profits earlier in the week, sending the share price to a four-month low.
Admiral gained after RBC Capital Markets upgraded the insurer to 'outperform' from 'sector perform' and lifted the price target to 3,560p from 3,100p after its full-year results.
Investment manager M&G was also in demand, rebounding after a heavy drop the previous session following its full-year results. The stock has pulled back in recent weeks as investors booked profits after it hit record highs last month.
In contrast, banking stocks continued their descent after a sell-off in the sector on Thursday, with heavyweights HSBC, NatWest, Barclays and Lloyds all finishing lower.
Precious metals miner Fresnillo lost its shine as gold and silver prices dropped. Gold was down 1.6% by the close, while silver tanked 5.9% as the dollar strengthened.
Others in the mining sector also weakened, including Rio Tinto despite speculation that Glencore could revive takeover talks once regulatory restrictions expire later this year. According to reports, Glencore is hopeful that a recent rally in coal prices and a shift in relative share performance could increase the possibility of a deal.
UK property developer Berkeley Group was in the red after warning that the war in Iran was "weighing heavily" on risk sentiment. The company said trading had remained constrained by the impact on consumer confidence of geo-political events and macro-economic uncertainty.
BP and Shell both extended their recent run as oil prices climbed.
Market Movers
FTSE 100 (UKX) 10,261.15 -0.43%
FTSE 250 (MCX) 22,077.64 -0.41%
techMARK (TASX) 5,860.42 0.23%
FTSE 100 - Risers
Metlen Energy & Metals (MTLN) 37.70p 3.43%
Tesco (TSCO) 488.90p 2.82%
Hikma Pharmaceuticals (HIK) 1,240.00p 2.56%
Diageo (DGE) 1,467.50p 2.37%
Imperial Brands (IMB) 3,201.00p 2.37%
M&G (MNG) 295.90p 2.35%
Bunzl (BNZL) 2,304.00p 2.13%
Rightmove (RMV) 464.00p 2.07%
Legal & General Group (LGEN) 246.30p 2.03%
London Stock Exchange Group (LSEG) 8,746.00p 1.86%
FTSE 100 - Fallers
Fresnillo (FRES) 3,406.00p -5.65%
Antofagasta (ANTO) 3,503.00p -5.60%
Rolls-Royce Holdings (RR.) 1,215.50p -4.48%
Weir Group (WEIR) 2,842.00p -4.44%
Anglo American (AAL) 3,109.00p -4.43%
Smiths Group (SMIN) 2,366.00p -4.37%
IMI (IMI) 2,640.00p -4.35%
Spirax Group (SPX) 6,815.00p -4.28%
Mondi (MNDI) 818.60p -4.23%
Intertek Group (ITRK) 3,734.00p -3.86%
FTSE 250 - Risers
Trainline (TRN) 199.50p 6.91%
Bridgepoint Group (Reg S) (BPT) 240.00p 5.63%
Shawbrook Group (SHAW) 379.50p 5.27%
Trustpilot Group (TRST) 176.10p 4.76%
Harbour Energy (HBR) 289.20p 3.06%
Kainos Group (KNOS) 786.00p 3.01%
Ithaca Energy (ITH) 256.50p 2.50%
AEP Plantations (AEP) 1,625.00p 1.88%
Syncona Limited NPV (SYNC) 94.60p 1.81%
GB Group (GBG) 204.00p 1.75%
FTSE 250 - Fallers
Ceres Power Holdings (CWR) 300.00p -8.48%
Bodycote (BOY) 661.00p -6.57%
Playtech (PTEC) 352.50p -4.73%
Aston Martin Lagonda Global Holdings (AML) 39.72p -4.70%
Jupiter Fund Management (JUP) 177.20p -4.63%
BlackRock World Mining Trust (BRWM) 884.00p -4.54%
Hill and Smith (HILS) 2,160.00p -4.21%
Pan African Resources (PAF) 144.20p -3.99%
RHI Magnesita N.V. (DI) (RHIM) 2,445.00p -3.93%
Endeavour Mining (EDV) 4,392.00p -3.89%
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