London open: FTSE up as worries about US involvement in Iran-Israel conflict abate

(Sharecast News) - London stocks rose in early trade on Friday as worries about possible US involvement in the Israel-Iran conflict abated, and as investors mulled the latest UK borrowing and retail sales figures.

At 0825 BST, the FTSE 100 was up 0.3% at 8,818.71.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: "The chances of the immediate involvement of US forces in the Israel-Iran conflict have receded after Donald Trump said he would make a decision whether to attack Iran's nuclear development facilities 'within the next two weeks'.

"Diplomatic efforts to de-escalate the situation are also in train with a delegation from the UK, France and Germany set to hold talks with Iranian officials in Geneva later today."

Nathan said "that pause looks to have curbed investors' risk aversion".

On the macroeconomic front, data from the Office for National Statistics showed the government borrowed more than expected in May.

Public sector net borrowing came in at �17.7bn. This was up �700m on May last year and �600m higher than the �17.1bn forecast by the Office for Budget Responsibility.

Separate figures from the ONS showed that retail sales fell more than expected in May in what turned out to be a "dismal" month for supermarkets.

Retail sales fell 2.7% following a 1.3% increase in April, which was revised up from a 1.2% jump. Economists were expecting a much more modest 0.7% decline.

The data showed that sales volumes at food stores fell 5% in May following 4.7% growth the month before. This was the largest monthly drop since May 2021.

The ONS said the fall was due mainly to reduced sales volumes in supermarkets, with retailers pointing to inflation and customer cutbacks, alongside reduced sales of alcohol and tobacco products.

ONS senior statistician Hannah Finselbach said: "Retail sales fell sharply in May with their largest monthly fall since the end of 2023.

"This was mainly due to a dismal month for food retailers, especially supermarkets, following strong sales in April. Feedback suggested reduced purchases for alcohol and tobacco with customers choosing to make cutbacks.

"The falls were consistent across all sectors with clothing and household goods stores reporting slow trading due to reduced footfall. There was also decreased demand for DIY items as consumers took advantage of the good weather over the previous few months.

"Looking at the wider picture, retail sales are still up across the latest three-months as a whole."

There wasn't much happening on the corporate front, but shares in housebuilder Berkeley tumbled as it posted a 5% fall in annual earnings but said it was confident about the future against a backdrop of falling interest rates and government plans to ramp up supply using brownfield sites.

Full-year pre-tax profit came in at �529m, while new house sales rose to 4,047 from 3,521 in 2024.

The company also announced that finance chief Richard Stern would become CEO, succeeding Rob Perrins, who will take on the role of executive chair as chairman Michael Dobson steps down in September after the group's annual general meeting.

Market Movers

FTSE 100 (UKX) 8,818.71 0.31%

FTSE 250 (MCX) 21,137.28 0.30%

techMARK (TASX) 5,031.88 0.19%

FTSE 100 - Risers

Melrose Industries (MRO) 512.80p 2.70%

Standard Chartered (STAN) 1,182.50p 2.60%

International Consolidated Airlines Group SA (CDI) (IAG) 314.80p 1.68%

Unite Group (UTG) 864.00p 1.59%

Barclays (BARC) 324.45p 1.47%

Pershing Square Holdings Ltd NPV (PSH) 3,888.00p 1.41%

Hiscox Limited (DI) (HSX) 1,279.00p 1.35%

Flutter Entertainment (DI) (FLTR) 20,000.00p 1.29%

Entain (ENT) 847.40p 1.29%

InterContinental Hotels Group (IHG) 8,190.00p 1.26%

FTSE 100 - Fallers

Berkeley Group Holdings (The) (BKG) 3,826.00p -7.81%

United Utilities Group (UU.) 1,127.50p -1.40%

BP (BP.) 388.20p -1.21%

Marks & Spencer Group (MKS) 362.30p -1.06%

Shell (SHEL) 2,671.50p -0.98%

Taylor Wimpey (TW.) 117.95p -0.88%

Sainsbury (J) (SBRY) 285.40p -0.56%

Persimmon (PSN) 1,313.00p -0.53%

National Grid (NG.) 1,040.50p -0.53%

Centrica (CNA) 165.95p -0.51%

FTSE 250 - Risers

Paragon Banking Group (PAG) 919.50p 2.74%

Carnival (CCL) 1,566.00p 2.45%

Wizz Air Holdings (WIZZ) 1,079.00p 2.18%

Bakkavor Group (BAKK) 220.00p 1.85%

Just Group (JUST) 142.60p 1.42%

CMC Markets (CMCX) 251.00p 1.41%

Fidelity Special Values (FSV) 369.00p 1.37%

Empiric Student Property (ESP) 103.40p 1.37%

OSB Group (OSB) 499.20p 1.30%

Allianz Technology Trust (ATT) 411.00p 1.23%

FTSE 250 - Fallers

NCC Group (NCC) 141.40p -3.55%

W.A.G Payment Solutions (WPS) 85.40p -2.95%

Watches of Switzerland Group (WOSG) 399.00p -1.63%

Hochschild Mining (HOC) 242.20p -1.62%

Pagegroup (PAGE) 235.20p -1.59%

SDCL Efficiency Income Trust (SEIT) 49.50p -1.20%

Auction Technology Group (ATG) 429.00p -1.04%

Avon Technologies (AVON) 1,760.00p -1.01%

Ithaca Energy (ITH) 176.00p -1.01%

4Imprint Group (FOUR) 3,445.00p -1.01%