London pre-open: Stocks to fall, oil prices back above $100 after US-Iran trade missile fire

(Sharecast News) - London stocks were set to slump at the open on Friday, while oil prices were back above $100 a barrel after the US and Iran opened fire in the vital Strait of Hormuz, and as investors eyed the latest US non-farm payrolls report.

The FTSE 100 was called to open around 75 points lower.

Despite the strikes - with each side claimed had been initiated by the other - US president Donald Trump said the ceasefire was ongoing and that talks with Iran were going very well. Oil prices shot up on news of the Hormuz strikes but by 0725 BST they had eased off their highs, with Brent crude up 0.6% at $100.66 a barrel.

Ipek Ozkardeskaya, senior analyst at Swissquote, said: "We have no idea how the situation will evolve, but the track record of the past two months is not really encouraging, and the Friday close is always a critical moment as the US tends to make decisive moves during no-market hours to give investors time to digest the information, hoping to push volatility into Monday and eventually drown out bad news with encouraging - often unfounded - announcements."

Looking ahead to the rest of the day, the non-farm payrolls report, unemployment rate and average earnings for April will be released at 1330 BST.

Kathleen Brooks, research director at XTB, said the market is expecting a 60,000 increase in payrolls for April, and for the unemployment rate to remain steady at 4.3%.

"If correct, this would be a sharp slowdown in jobs growth compared to the 178k jobs growth for March, however, we think that it will take a much weaker jobs number to persuade the Fed to cut rates once more," she said.

"Last week we heard that three Fed members dissented against keeping an easing bias in the Fed's statement, and inflation is a growing concern at the Fed. There is currently only a very slim chance of a near term rate cut, with the market expecting rates to remain unchanged for the rest of the year, even if the Fed's March Dot Plot is still expecting to cut rates once in 2026."

On home shores, data from Halifax showed that house prices ticked lower in April as geopolitical uncertainty weighed on consumer sentiment.

House prices edged down 0.1% last month, adding to March's 0.5% decline. The average property price now stands at �299,313. Annual growth slowed to 0.4% from 0.8% in March.

Amanda Bryden, head of mortgages at Halifax, said: "After a strong start to the year, recent global developments have added a greater degree of uncertainty to the outlook. In particular, higher energy prices have fed into inflation expectations, prompting markets to reassess the path for interest rates - a shift that has already pushed up borrowing costs for many buyers.

"This understandably leads to more caution among some households, with the cost-of-living once again front of mind and extra thought being given to planned property moves."

In corporate news, Intertek rejected private equity group EQT's sweetened offer of �58 a share saying it "significantly undervalues" the company and its future prospects, adding that there was major execution risk given its conditional nature.

The company said it still believed that a potential separation, either through a sale or demerger, of its energy & infrastructure division from testing & assurance operations presented a "significant value creation opportunity for shareholders".

BA and Iberia owner IAG warned that annual profit would be lower than expected at the beginning of the year, with the Middle East conflict set to have a more substantial impact throughout the rest of the year as the increase in the fuel cost "starts to manifest itself".

Telecommunications provider Airtel Africa posted a strong set of fullyear results, with revenues, margins and earnings all rising sharply as the group benefited from robust customer growth, higher data usage and continued momentum in its mobile money business.

Airtel Africa said reported revenues jumped 29.5% to $6.42bn for the year ended 31 March, driven by broadbased growth across its markets and supported by tariff adjustments in Nigeria.

Underlying earnings rose 37.2% to $3.16bn, with margins improving to 49.3% from 46.5% a year earlier. Operating profits increased 45.1% to $2.12bn, while pre-tax profits more than doubled to $1.42bn.