The FTSE 100 has demonstrated resilience, shrugging off concerns over escalating oil prices and newly imposed tariffs by the United States. Despite an initial dip, London's primary stock index saw an increase of 30 points, reaching 10,672.
Brent crude oil prices have climbed to approximately $100 per barrel, a level not seen since May. This rise is attributed to renewed hostilities in the Middle East, following an attack on two Saudi Arabian tankers in the Red Sea by Houthi militants. This incident threatens a critical oil supply route and has intensified fears of further inflationary pressures due to higher energy costs.
President Donald Trump announced plans to reimpose tariffs ranging from 10% to 12.5% on dozens of countries, including the UK and the European Union. US Trade Representative Jamieson Greer stated that the action aims to correct human rights abuses and distortive trade practices, emphasizing the enforcement of forced labor import bans. These new tariffs cover nearly all US imports but include exemptions for products such as oil, gas, fertilizer, and certain food items. The previous iteration of these tariffs was struck down by the Supreme Court in April 2025.
Global borrowing costs have been on the rise, adding pressure to national budgets. The yield on UK ten-year gilts saw a slight retreat to 5.079% on Friday morning, down 2 percentage points from its recent peak, but it remains at its highest level since May.
Beyond external factors, the UK stock market has also been buoyed by a surge in takeover activity, with a series of bids prompting anticipation of more to come. This sentiment has contributed to an uplift in share prices across the market.
In broader European markets, Germany's Dax index opened 0.62% higher, while France's CAC index rose by 0.23%.
Analysts suggest that geopolitical tensions, particularly concerning Iran's stance and potential interventions in the Middle East, could lead to further volatility in global energy markets. The prospect of interest rate hikes by the US Federal Reserve this year also adds to market uncertainty.
The FTSE 100 has also seen a boost from defence stocks this week, driven by expectations of increased military spending following the appointment of John Healey as the new Chancellor. Healey had previously resigned from his role as Defence Secretary in protest over insufficient funding for the armed forces.
Among the top performers on the FTSE 100 on Friday morning was analytics firm Relx, which rose 3.59% after a broker upgrade. 3i Group followed with a 3.29% increase, and JD Sports was up 3.22%. Conversely, Airtel Africa saw its shares fall 6% following its announcement of plans to list its mobile unit in London later this year, and Howdens experienced a 1.5% decline.