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London’s blue chip index opened lower on Friday as tensions between the US and Iran remained a key focus; meanwhile NatWest saw its shares decline despite posting a higher first-quarter profit. The FTSE 100 index opened down 44.18 points, 0.4%, at 10,332.95. The FTSE 250 was down 40.60 points, 0.2%, at 22,424.55, and the AIM all-share was down 1.42 points, 0.2%, at 792.67. The Cboe UK 100 was down 0.4% at 1,030.23, the Cboe UK 250 was marginally lower at 19,534.70, and the Cboe small companies was up 0.1% at 18,100.10. A number of global financial markets were closed for the Labour Day holiday, including those in China, France, Germany, Ireland, Italy, South Africa, Spain and Switzerland, thinning trading volumes across Europe. Middle East tensions remained a key focus, with US President Donald Trump said that only he and a small group of officials know the true status of talks with Iran, suggesting negotiations may be progressing despite public signs of a standstill. According to sources, Iran’s revised peace proposal could be delivered later on Friday. Brent crude for July delivery was trading at $110.70 a barrel early Friday, down from $114.38 late Thursday, as traders weighed the potential for renewed diplomatic momentum. In currency markets, the pound was quoted at $1.3608 early Friday, up from $1.3588 at the London equities close on Thursday. Against the euro, sterling strengthened to €1.1592 from €1.1578 a day earlier. The euro traded at $1.1738 early Friday, slightly higher than $1.1731 late Thursday. Against the yen, the dollar was quoted at JP¥156.50, down from JP¥156.65. On the domestic data front, UK annual house price growth accelerated in April, according to Nationwide Building Society, adding to signs of resilience in the housing market. Nationwide said annual house price growth picked up to 3.0% in April from 2.2% in March, beating the FXStreet-cited consensus for an unchanged reading. On a monthly basis, prices rose 0.4%, slowing from 0.9% in March but defying expectations for a 0.3% decline. The average UK house price increased to £278,880 from £277,186. Nationwide said the housing market continues to regain momentum after a slowdown at the start of the year, despite economic uncertainty linked to the Middle East conflict. Chief Economist Robert Gardner noted that higher energy prices have not derailed the recovery, although broader housing indicators, including new buyer enquiries reported by the Royal Institution of Chartered Surveyors, have softened. In London’s blue-chip index, Pearson led the FTSE 100, up 5.0%, after reporting a solid start to the year. The education publisher said underlying group sales rose 4% in the first quarter, with all business units performing in line with expectations. Virtual Learning was the standout performer, with underlying sales up 21%, while Assessment & Qualifications sales fell 1% as expected. Pearson expects that division to return to growth from the second quarter. Pearson reaffirmed its 2026 guidance, targeting mid-single-digit underlying sales growth and adjusted operating profit between £640 million and £685 million, based on exchange rates at the end of 2025. It also expects free cash flow conversion of 90% to 100%. The company maintained its medium-term outlook, aiming for mid-single-digit compound annual growth in underlying sales, sustained margin improvement and strong cash generation. Chief Executive Omar Abbosh said: ‘We have had an encouraging start to the year, with a good performance in line with our expectations and continued progress against our strategy...We remain confident in the momentum we are seeing for 2026.’ At the other end of the index, NatWest was the biggest faller, down 3.7%, despite reporting higher first-quarter profit. The bank said pretax operating profit rose to £2.03 billion from £1.81 billion a year earlier, as total income improved to £4.36 billion from £3.98 billion. Net interest income increased to £3.39 billion from £3.03 billion, supported by deposit margin expansion and lending balance growth. NatWest generated more than £100 million of additional cost savings in the quarter, helping improve its cost-to-income ratio, excluding litigation and conduct, to 46.5% from 48.6%. Return on tangible equity remained robust at 18.2%. The lender now expects 2026 total income, excluding notable items, to be at the top end of its previously guided £17.2 billion to £17.6 billion range. It reaffirmed the remainder of its guidance provided with full-year results. Chief Executive Paul Thwaite said NatWest has started the year with ‘positive momentum, underpinned by healthy customer activity.’ Elsewhere in the FTSE 100, United Utilities and Severn Trent were in negative territory, down 3.3% and 2.0% respectively, after Citi lowered both stocks to ’neutral’ from ’buy’. In Asia on Friday, the Nikkei 225 index in Tokyo ended 0.4% higher, while the S&P/ASX 200 in Sydney closed up 0.7%. In the US on Thursday, Wall Street ended firmly higher. The Dow Jones Industrial Average rose 1.6%, the S&P 500 gained 1.0%, and the Nasdaq Composite advanced 0.9%. The yield on the US 10-year Treasury was quoted at 4.39%, widening slightly from 4.38%. The yield on the US 30-year Treasury was 4.98%, unchanged from Thursday. On the FTSE 250, cybersecurity firm NCC Group topped the mid-cap index, up 7.0%. Raspberry Pi followed, up 3.8%. Rotork was third, rising 2.6% after reporting first-quarter performance in line with expectations. Revenue increased by a low single-digit percentage on an organic constant currency basis, while order intake declined at a low single-digit rate. The flow control specialist said growth in Chemical, Process & Industrial and Water & Power was offset by weaker Oil & Gas activity, particularly in EMEA. It noted some project delays in the Middle East due to supply chain disruption and customers prioritising production restarts. Among smaller caps, GenIP plunged 33% after raising £350,000 through a placing of 5.0 million shares at 7 pence each. Gold was quoted at $4,584.56 an ounce early Friday, down from $4,616.72 on Thursday. Still to come on Friday’s economic calendar are UK mortgage approvals and manufacturing PMI data, as well as US manufacturing PMI and ISM manufacturing PMI figures. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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