The FTSE 100 rose on Friday as traders reacted to the latest developments in the Middle East.
Headline-to-headline trading continued on Friday, with stocks rising on the back of the latest comments from US officials suggesting that a deal with Iran for a 60-day extension of the current ceasefire was close.
But we’ve been here before, and markets are showing signs of caution with the FTSE 100 rising just 0.3% in mid-morning trade.
Just this week, the US has hinted at a deal only to bomb Iran, which was met with retaliatory strikes.
We may see a strong reaction in markets when a deal is signed, but until then, it’s likely that UK stocks remain range-bound.
“The FTSE 100 was steady on Friday as global markets continue to try and unpick the latest movements in the Middle East,” said AJ Bell investment director Russ Mould.
“Reports that Tehran and Washington have agreed a framework for a 60-day extension to the ceasefire, which would facilitate the reopening of the Strait of Hormuz and enable fresh negotiations over Iran’s nuclear programme, have engendered some positivity.
“But there remain conflicting noises about whether the deal will get sign-off from President Trump.”
Most FTSE 100 stocks were higher on Friday, with cyclical stocks leading the way. After falling heavily earlier in the week, Autotrader rallied 4% to the top of the FTSE 100 leaderboard on Friday.
British American Tobacco was one of the worst performers of the season as defensive shares fell out of favour with hopes of a US/Iran deal on the horizon.
Centrica was down 2%, and SSE lost 1.3% on similar sentiments.