FTSE 100 jumps 148 points to 10,452 as peace deal hopes lift stocks

The FTSE 100 surged 1.5% on Friday as President Donald Trump signaled a breakthrough in US-Iran talks, sending oil below $90 a barrel and lifting risk assets across global markets.

The FTSE 100 jumped 148 points, or 1.5%, to 10,452 as hopes of a US-Iran peace deal triggered a broad-based rally across European equities.

"The market is moving from pricing escalation risk to pricing de-escalation relief," said Patrick Munnelly, market strategist at Tickmill Group. "That does not remove geopolitical uncertainty, but it materially reduces the immediate threat of a sustained energy shock."

International Consolidated Airlines Group led the advance, rising 5.5%, followed by Rolls-Royce Holdings with a 4.5% gain. Housebuilders staged a strong recovery, with Vistry Group jumping 5.1%, Persimmon adding 3.9% and Barratt Redrow climbing 3.7%. The rally offset a 3.3% decline in BP and a 2.4% drop in Shell as Brent crude fell 2% to around $88.50 a barrel. Mining stocks also gained, with Antofagasta rising 5.3% and Fresnillo adding 4.9%.

The rally erased much of this week's earlier losses and shifted the narrative around UK equities, which had been weighed down by elevated oil prices and uncertainty over the Middle East conflict. The Bank of England's rate-setting committee meets next week, and data showing the UK economy contracted 0.1% in April reinforced expectations that policymakers may cut rates to support growth.

The weaker GDP reading did little to dampen the rally. While the monthly decline — driven by a 0.2% drop in services output — marked a soft start to the second quarter, the economy still expanded 0.7% over the three months to April, its fifth consecutive period of three-month growth. Gross domestic product was 1.2% higher than a year earlier.

The cross-asset move was global in scope. US stocks staged a powerful comeback overnight, with the S&P 500 climbing 1.8% and the Nasdaq Composite jumping 2.5%. Asian markets followed suit Friday, with Tokyo's Nikkei 225 gaining 2.8%, Hong Kong's Hang Seng rising 1.7% and South Korea's Kospi surging 4.6%. Government bond prices rose and yields fell as investors priced in a lower probability of rapid rate hikes, while the dollar weakened against major currencies.

Trump said Thursday he had called off a third consecutive day of strikes on Iran and that a deal with Tehran was close to being finalized, with a signing ceremony potentially taking place in Europe as soon as this weekend. Brent crude has fallen more than 4% from this week's highs and was trading near $86 a barrel in late afternoon trade, though that remains well above the roughly $70 level before the conflict began in late February.

Goldman Sachs lowered its 2027 oil price target to $80 a barrel on Thursday, citing stronger supply growth from the US, Brazil, Guyana, Venezuela and the UAE, combined with structural demand weakness in China. The bank warned that a faster normalization of supply could push Brent to $70 in late 2026, while prolonged export disruptions could send prices above $110.

In a separate development, SpaceX debuted on Wall Street on Friday at $135 per share, raising about $75 billion in what is set to become the largest initial public offering on record, valuing Elon Musk's rocket company at $1.75 trillion.

This article is for informational purposes only and does not constitute investment advice.