The FTSE 100 rose on Friday as geopolitical events favoured equity bulls, with Iran signalling it could reopen the Strait of Hormuz and the Chinese President’s visit to the White House proving constructive.
Iran has suggested that it could reopen the Strait of Hormuz in seven days should a plan to end the war be agreed on.
This will be music to the ears of equity bulls who may have started to feel a little uncomfortable with the prospect of a series of interest rate hikes by major central banks in the closing stages of the year.
But a deal isn’t done yet, and until it is, traders will remain cautious, knowing there is a long road to energy market normalisation.
Falling oil prices helped boost the FTSE 100, which was up 0.2% at the time of writing after giving back some of its early gains.
“European equities enjoyed a strong boost at the end of the trading week as investors regained their risk appetite,” said Dan Coatsworth, head of markets at AJ Bell.
“Miners topped the FTSE 100 risers’ list, with banks and pharma also in strong demand. Brent crude oil pulled back slightly to just below $106, but remains at elevated levels. Government bond yields eased back a touch after yesterday’s shock session where the US 30-year Treasury hit its highest level since 2004.”
Precious metals miners Fresnillo and Endeavour were among the FTSE 100’s gainers, rising more than 2%.
The recent dip in Computacenter has been bought into, and the bounce continued on Friday with shares adding another 3%. Computacenter was not only the top riser on Friday, but is the best-performing FTSE 100 stock year to date, up 85%.
AI-focused investment trust Polar Capital Technology Trust was 1.5% to the good after a strong session for the sector in the US.
Falling oil prices hit producers, and Ithaca was the biggest loser, down 4%, while BP dipped 3%. If the US and Iran strike a deal, the sector would likely fall further. BAE Systems and Babcock were other notable fallers as traders reacted to a Middle East deal.