London midday: FTSE extends gains, oil falls further amid Mideast peace hopes

(Sharecast News) - London stocks had extended gains by midday on Friday as oil prices fell further after Donald Trump said a deal with Iran was close to being agreed, and as investors mulled the latest UK GDP data and eyed the hotly-anticipated SpaceX IPO.

The FTSE 100 was up 1% at 10,410.09, while Brent crude was down 3.3% at $87.42 a barrel and West Texas Intermediate was off 3.4% at $84.74.

Sentiment was boosted after the US President called off further strikes on Iran on Thursday and said a peace deal between the two countries could be signed in the coming days. Trump said: "We just made a great settlement of the war with Iran, and we're going to be subject to finalisation of documents, which should get done over the next few days."

He said a signing ceremony could take place over the weekend, with the documents in a "pretty final shape". He also said the Strait of Hormuz "will officially open as soon as we sign, which could be soon, very soon".

His comments came shortly after the US President said on Truth Social that he would hit Iran "very hard tonight" and take Kharg Island at some point in the near future.

Dan Coatsworth, head of markets at AJ Bell, said: "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.

"The maxim 'once bitten, twice shy,' isn't being applied by the market when it comes to Donald Trump's pronouncements, as his latest of several suggestions a deal is close has helped to drive stocks higher once more.

"Oil is heading in the opposite direction, with the Brent crude benchmark dropping and sticking below $90 per barrel for only the third time since the Middle East conflict began.

"Names with links to the aviation and tourism sector, plus interest rate sensitive sectors like housebuilding were in heavy demand."

On home shores, figures released by the Office for National Statistics showed the economy contracted 0.1% on the month in April, in line with expectations.

This followed growth of 0.3% in March and 0.4% in February. The ONS said the decline was driven by a 0.2% fall in services, which was partially offset by a 0.1% rise in construction. Production showed no growth in April.

The ONS said the largest negative contribution to services sector output came from administrative and support service activities, which fell by 2.2%

The second largest negative contribution came from arts, entertainment and recreation, which saw a 4.3% decline. This was driven by a fall of 9.1% in sports activities and amusement and recreation activities, some of which can be attributed to effects from the Middle East conflict, with the cancellation of multiple sporting events in the region affecting the output of UK-based businesses, the ONS said.

In the three months to April, the economy grew 0.7%, following growth of 0.6% in the three months to March and 0.5% in the three months to February.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "The figures leave the economy on course for a much weaker second quarter, and while inflation risks have not disappeared, the loss of momentum makes it easier to argue that the Bank of England will keep rates on hold."

Looking ahead to the rest of the day, investors will turn their attention to the SpaceX IPO. Ipek Ozkardeskaya, senior analyst at Swissquote, noted the company already made history on Thursday by selling 555.6 million shares priced at $135 each, raising the $75bn that it was looking for and giving it nearly the $1.8 trillion valuation that it was targeting.

"It equals the combined value of the 29 biggest IPOs in US history since 2000 - adjusted for inflation - including Meta, Google, Hilton, Airbnb, DoorDash, Uber, Snowflake and GM," she said. "Yes, it's huge. So today, everyone will be watching SpaceX leave the launchpad."

In equity markets, airlines shot higher, with BA and Iberia owner IAG, Wizz and easyJet all up as falling oil prices eased concerns about fuel costs.

Housebuilders also gained, with Persimmon, Barratt, Berkeley and Vistry up as the GDP data made a rate hike this year less likely.

Infrastructure group Kier rose after saying it had won an extension to continue delivering maintenance and improvements across South West Water's network over the next two years.

On the downside, energy giants Shell and BP slumped in tandem with oil prices, along with Diversified Energy and Ithaca.

Defence firm BAE Systems was also in the red.

Market Movers

FTSE 100 (UKX) 10,410.09 1.03%

FTSE 250 (MCX) 23,308.58 1.47%

techMARK (TASX) 5,943.97 0.32%

FTSE 100 - Risers

Smurfit Westrock (DI) (SWR) 3,171.00p 7.88%

International Consolidated Airlines Group SA (CDI) (IAG) 433.90p 6.53%

Anglo American (AAL) 3,986.00p 4.71%

Lion Finance Group (BGEO) 10,920.00p 4.70%

Antofagasta (ANTO) 4,028.00p 4.49%

Barclays (BARC) 469.75p 4.40%

Fresnillo (FRES) 2,993.00p 4.34%

Rolls-Royce Holdings (RR.) 1,311.20p 4.25%

Berkeley Group Holdings (The) (BKG) 3,452.00p 4.16%

Melrose Industries (MRO) 467.20p 4.11%

FTSE 100 - Fallers

BP (BP.) 521.20p -4.40%

Shell (SHEL) 3,164.50p -3.34%

BAE Systems (BA.) 1,910.50p -1.67%

Centrica (CNA) 184.75p -1.57%

The Sage Group (SGE) 796.20p -1.17%

Bunzl (BNZL) 2,534.00p -0.94%

Tesco (TSCO) 467.10p -0.79%

SSE (SSE) 2,376.00p -0.67%

Flutter Entertainment (DI) (FLTR) 8,294.00p -0.58%

Autotrader Group (AUTO) 453.00p -0.46%

FTSE 250 - Risers

Wizz Air Holdings (WIZZ) 1,112.00p 8.59%

Raspberry PI Holdings (RPI) 849.75p 6.71%

Vistry Group (VTY) 249.40p 6.48%

TBC Bank Group (TBCG) 4,546.00p 5.14%

Pan African Resources (PAF) 108.60p 5.04%

SSP Group (SSPG) 170.30p 4.99%

Marshalls (MSLH) 136.60p 4.69%

Ibstock (IBST) 96.05p 4.57%

W.A.G Payment Solutions (EWG) 105.60p 4.55%

BlackRock World Mining Trust (BRWM) 970.00p 4.41%

FTSE 250 - Fallers

Diversified Energy Company (DI) (DEC) 1,010.00p -5.25%

Ithaca Energy (ITH) 240.80p -4.24%

Harbour Energy (HBR) 256.20p -3.82%

Energean (ENOG) 737.50p -1.86%

Softcat (SCT) 1,779.00p -1.61%

Oxford Nanopore Technologies (ONT) 118.60p -1.58%

QinetiQ Group (QQ.) 477.80p -1.16%

Oxford Biomedica (OXB) 600.00p -0.98%

RTW Biotech Opportunities Ltd (RTW) 2.19p -0.90%

Greggs (GRG) 1,699.00p -0.87%