13th Mar 2026 09:12
(Alliance News) - Stock prices in London opened lower on Friday, as escalating military action between Israel and Iran and heightened volatility in oil markets weighed on investor sentiment.
The FTSE 100 index opened down 69.54 points, 0.7%, at 10,234.86. The FTSE 250 was down 164.21 points, 0.7%, at 22,006.61, and the AIM all-share was down 4.91 points, 0.6%, at 762.11.
The Cboe UK 100 was down 0.6% at 1,016.15, the Cboe UK 250 was down 0.9% at 19,286.40, and the Cboe small companies was marginally lower at 17,650.52.
In European equities on Friday, the CAC 40 in Paris was down 1.4%, while the DAX 40 in Frankfurt was down 1.3%.
Explosions were heard in Iran's capital, Tehran, after Israel said it had launched another "wide-scale wave of strikes" against regime targets, following reports that fresh missiles had been fired from Iran. In a social media post, US President Donald Trump said the US is "totally destroying" the Iranian regime and told followers to "watch what happens" in the war on Friday.
Elsewhere, a US refuelling plane went down over western Iraq. The US military described it as an "incident" involving two aircraft and said neither hostile nor friendly fire was to blame.
In a separate move, the US temporarily authorised countries to purchase sanctioned Russian oil and petroleum already loaded on vessels at sea. Treasury Secretary Scott Bessent said the measure, which runs until April 11, is intended to "promote stability in global energy markets" during the conflict and would not provide significant financial benefit to Russia.
Brent crude swung back above the USD100 level, trading at USD100.28 a barrel early Friday, compared with USD98.65 late Thursday, after three more cargo vessels were struck in the Gulf and Iran's new supreme leader vowed to continue blocking the Strait of Hormuz, a route that handles roughly one-fifth of global oil shipments.
Bessent said the recent spike in oil prices represents a temporary disruption and added that the US government would begin escorting vessels through the Strait of Hormuz "as soon as it is militarily possible".
The pound was quoted at USD1.3266 early Friday in London, down from USD1.3410 at Thursday's equities close. The euro stood at USD1.1445, lower against USD1.1522. Against the yen, the dollar traded at JPY159.42, up from JPY159.21.
UK economic data showed the economy stalled in January. The Office for National Statistics said gross domestic product was flat month-on-month, missing expectations for 0.2% growth. The reading follows monthly gains of 0.1% in December and 0.2% in November.
Services output was unchanged, while production fell 0.1%. Within services, admin and support activities dropped 2.3%, largely due to a 5.7% decline in employment activities, which had the largest single negative impact on the overall GDP reading.
Construction rose 0.2% after three consecutive monthly falls. Over the three months to January, GDP grew 0.2% compared with the prior three-month period. Services also rose 0.2%, production increased 1.3%, while construction output declined 2.0%, marking a fourth straight three-month fall.
Separate trade data showed the UK's total goods and services deficit narrowed by GBP5.1 billion to GBP1.8 billion in the three months to January.
The goods deficit narrowed by GBP3.1 billion to GBP56.6 billion, while the services surplus widened by GBP2.0 billion to GBP54.8 billion. In January alone, goods exports rose GBP2.0 billion, or 6.7%, while imports fell GBP300 million. Exports to the US declined by GBP500 million, while imports from the US rose by GBP600 million.
On the FTSE 100, housebuilder Berkeley was down 2.4% after reaffirming its profit guidance and saying its long-term outlook for London remains positive, though it warned the Middle East conflict is weighing heavily on risk sentiment.
Declines were broad-based, with banks and miners among the sectors dragging on the index. Oil majors BP and Shell were among the few gainers, up 1.7% and 0.7% respectively, supported by higher crude prices.
Among smaller caps, Catenai rose 21% after saying Klarian will repay a GBP450,000 unsecured loan facility by March 31 and that it had made a further GBP250,000 investment into Alludium, taking its stake to over 16%.
Atome Energy jumped 18% after signing definitive debt financing agreements for its USD650 million low-carbon fertiliser plant in Villeta, Paraguay.
The company secured a USD420 million debt package from a consortium including the International Finance Corp, European Investment Bank and IDB Invest. The loans will run for 15 years and support construction of the 260,000-tonnes-per-year plant.
Equity agreements for the remaining USD244 million are expected within 30 days. The project will produce fertiliser without fossil fuels and is backed by a long-term offtake agreement with Yara International.
In Asia on Friday, the Nikkei 225 index in Tokyo closed down 1.2%. In China, the Shanghai Composite ended 0.8% lower, while the Hang Seng index in Hong Kong closed down 1.0%. The S&P/ASX 200 in Sydney closed down 0.1%
In the US on Thursday, Wall Street ended sharply lower, with the Dow Jones Industrial Average down 1.6%, the S&P 500 down 1.5% and the Nasdaq Composite down 1.8%.
A batch of US data is due later in the session, including the fourth-quarter core PCE index at 1230 GMT, with estimates pointing to a 2.7% quarter-on-quarter increase.
The yield on the US 10-year Treasury was quoted at 4.27%, widening from 4.25%. The yield on the US 30-year Treasury was quoted at 4.90%, widening from 4.88%.
Gold was quoted at USD5,076.70 an ounce early Friday, down from USD5,131.30 on Thursday.
Still to come on Friday's economic calendar, eurozone industrial production is scheduled.
In the US, GDP and quarterly personal consumption expenditures data for the fourth quarter are due, alongside the latest monthly PCE reading for January and durable goods orders. Canada will publish unemployment and manufacturing sales data, while Germany current account figures are also expected.
By Eva Castanedo, Alliance News reporter
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