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The FTSE 100 was in the red at midday on Friday, amid a mixed picture from UK economic data and as markets await the outcome of negotiations regarding the Middle East conflict. The FTSE 100 index was down 67.15 points, 0.7%, at 10,311.67. The FTSE 250 was down 82.56 points, 0.4%, at 22,382.59, and the AIM all-share was down 3.30 points, 0.4%, at 790.79. The Cboe UK 100 was down 0.6% at 1,028.06, the Cboe UK 250 was down 0.4% at 19,473.20, and the Cboe small companies was down 0.1% at 18,078.79. Geopolitics remained firmly in focus. As the stalemate between Washington and Tehran drags on and markets await signs of a breakthrough, the possibility of renewed conflict continues to cast a shadow. Friday is seen as the deadline for Pakistan to receive Iran’s revised peace proposal, after US President Donald Trump rejected an earlier version. Mediators in Islamabad believe a fair agreement is within reach and that it is now up to Tehran to respond, according to sources familiar with the talks. While negotiators have worked throughout the week to make progress, both the US and Iran have stepped up their rhetoric as they await a response. Brent crude for July delivery was trading at $111.38 a barrel early Friday, down from $114.38 late Thursday, as traders balanced hopes of diplomacy against the risk of escalation. 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. In currency markets, the pound was quoted at $1.3605 midday Friday, up from $1.3588 on Thursday. Against the euro, sterling rose to €1.1587 from €1.1578 a day earlier. The euro stood at $1.1741, higher compared with $1.1731, while the dollar traded lower at JP¥156.55 against JP¥156.65. On the macro front, UK data painted a mixed picture of resilience and caution. UK manufacturing growth exceeded expectations in April, according to S&P Global. The manufacturing purchasing managers’ index rose to a 47-month high of 53.7 from 51.0 in March, beating both the flash estimate of 53.6 and remaining comfortably above the 50 mark that separates growth from contraction. S&P Global said part of the strength reflected clients bringing forward purchases to avoid anticipated price rises. New export orders increased for a fourth consecutive month, though at a slower pace than in March, with stronger demand from the US, China, Japan and India. However, business optimism fell to its lowest level in a year, as concerns over the US-Israel war with Iran weighed on confidence. Further data from the Bank of England showed that UK net mortgage approvals unexpectedly rose in March. Net approvals for house purchases increased to 63,500 from 62,700 in February, ahead of the FXStreet-cited consensus for a decline to 60,000. The figure was slightly above the six-month average of around 63,200. The annual growth rate for net mortgage lending eased to 3.0% from 3.4%, while net borrowing of mortgage debt by individuals rose to £6.2 billion from £5.2 billion, above the previous six-month average of £4.9 billion. The effective interest rate on newly drawn mortgages edged down to 4.03% from 4.10%. Consumer credit net borrowing dipped slightly to £1.9 billion from £2.0 billion, though it remained above the recent six-month average. These figures follow earlier data from Nationwide Building Society, which showed UK annual house price growth accelerating to 3.0% in April from 2.2% in March, ahead of expectations for an unchanged reading. On a monthly basis, prices rose 0.4%, slowing from 0.9% in March but defying forecasts for a 0.3% fall. The average UK house price increased to £278,880 from £277,186. Nationwide said the housing market continues to regain momentum following a slowdown at the turn of the year, despite wider economic uncertainty linked to the Middle East conflict. In the FTSE 100, Pearson and NatWest traded at opposite ends of the index after their respective updates. Pearson rose 2.3% after backing its 2026 guidance, as growth in virtual learning drove first-quarter performance. 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.’ NatWest fell 4.2% despite reporting higher first-quarter profit, as investors focused on a softer-than-expected outlook for income. The Edinburgh-based lender said pretax profit rose 12% to £2.03 billion from £1.81 billion a year earlier, as total income increased 9.5% to £4.36 billion and net interest income climbed 12% to £3.39 billion. However, NatWest said it expects 2026 income to be at the top end of its £17.2 billion to £17.6 billion range, below market expectations. It maintained other guidance and highlighted continued cost savings and strong customer activity. The bank noted that strong lending and deposit growth were partially offset by a £1.8 billion reduction in assets under management and administration, driven by negative market movements. Net inflows of £900 million were recorded, with around 23,000 new investors joining during the quarter. United Utilities was down 2.8%, giving back recent gains after confirming the outcome of its £800 million equity raise and facing a broker downgrade. The water utility said its placing, retail offer and subscription raised around £800 million to fund its expanded investment programme. Citigroup lowered both United Utilities and peer Severn Trent, which fell 3.3%, to ’neutral’ from ’buy’. Among smaller caps, Georgina Energy dropped 20% after raising £1 million through a placing of 37.0 million shares at 2.7p each. GenIP fell 36% after raising £350,000 in a placing of 5.0 million shares at 7p each, while ADM Energy lost 14% after raising £375,000 gross in a placing and subscription. Shield Therapeutics declined 14% after providing a first-quarter trading update and announcing that its chief financial officer will step down in June. The pharmaceutical firm said group net revenue rose to $18 million from $7 million a year earlier, with Ebit turning positive at around $2.5 million from around $4.4 million, supported by milestone income and strong ACCRUFeR sales. However, new prior authorisation requirements under New York Medicaid are expected to weigh on sales. Stocks in New York were called mixed ahead of the open. The Dow Jones Industrial Average was called up 0.2%, the S&P 500 up 0.1%, and the Nasdaq Composite down 0.1%. The yield on the US 10-year Treasury was quoted at 4.39%, slightly higher than 4.38%. The yield on the US 30-year Treasury was 4.98%, unchanged from Thursday. Gold was quoted at $4,567.93 an ounce at midday Friday, down from $4,616.72 on Thursday. Still to come on Friday’s economic calendar are the US manufacturing PMI and ISM manufacturing PMI figures. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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