The FTSE 100 was range-bound again on Friday as Middle East peace talks showed signs of progress, but utilities weighed on the index.
Despite the S&P 500 closing at another record high overnight, London’s leading index looked set to limp into the weekend, trading down 0.1% at the time of writing.
“Crisis, what crisis? In forging ahead to new all-time highs on Thursday night, the S&P 500 has now increased by $1.5 trillion in value since the Iran war began,” said AJ Bell investment director Russ Mould.
“While other global indices aren’t quite as buoyant – Asian stocks largely easing back in their latest trading sessions and European shares starting Friday modestly lower – most of the falls in the initial stages of the conflict have been erased.”
These hopes were evident in a splattering of financials and retailers, including Burberry, that desperately need Middle Eastern shoppers to return to their stores.
“Events in the Middle East remain the key market driver, and President Trump’s overnight comments on the potential for further peace talks between the US and Iran could boost equity markets today,” said Derren Nathan, head of equity research, Hargreaves Lansdown.
“A ceasefire between Israel and Iranian proxy Hezbollah after Israeli/Lebanese talks in Washington provides further hope for de-escalation.”
The talks will be seen as a step forward by traders who clearly view the US as the ideal place to deploy cash.
The FTSE 100 is showing signs of lagging behind its US counterparts, as it has for much of the past decade. London’s leading index had a solid year amid market volatility as Donald Trump imposed tariffs on the world, as investors flocked to ‘safer’ stocks, many of which are found in the FTSE 100.
But the lack of technology shares and weighting toward commodities sometimes causes it to lag US peers when sentiment shows signs of improvement.
This was the case on Friday when precious metals miners Fresnillo and Endeavour fell as gold prices lost their shine and more defensive names such as SSE, Tesco and National Grid weighed.
Utilities were under pressure after the UK government announced plans to review the link between electricity and gas prices. SSE was the FTSE 100’s top faller, losing 5%.