FTSE 100 set for weekly gains as peace talks boost sentiment

The UK’s main stock indices moved higher on Friday, positioning themselves for weekly gains as investors turned their attention to an upcoming US inflation reading and geopolitical developments in the Middle East.

The blue-chip FTSE 100 rose 0.3% by 1140 GMT, marking its third consecutive week of gains.

Meanwhile, the midcap FTSE 250 outperformed with a 1% increase, putting it on track for its second straight week of advances.

Market sentiment remained cautiously optimistic, supported by global trends as traders awaited clarity on both economic and geopolitical fronts.

Focus on US inflation data

Investor attention was firmly fixed on the US inflation data scheduled for release at 8:30 am.

The reading is expected to show that consumer prices recorded their largest increase in nearly four years in March.

The data is likely to play a crucial role in shaping expectations around monetary policy and could influence global equity markets in the near term.

Geopolitical developments shape market

Markets also remained attentive to geopolitical developments, particularly the anticipated peace talks between US and Iranian officials set to take place in Islamabad over the weekend.

Global equities showed resilience as traders waited for the outcome of these discussions, which could have significant implications for energy markets and broader geopolitical stability.

Despite a recently announced two-week ceasefire in the Middle East, tensions persisted.

The Strait of Hormuz remained closed on Friday, while Israel and Hezbollah continued to exchange fire in Lebanon.

Both the United States and Iran described these incidents as violations of the ceasefire agreement.

Earlier in the week, equities had rebounded as oil prices declined following the ceasefire announcement.

This had raised hopes for a potential resumption of shipping activity through the strategically important Strait of Hormuz.

However, oil flows from the Gulf remain heavily restricted, keeping crude futures near the $100 per barrel mark.

Stock-specific movements

Among individual stocks, AO World emerged as a strong performer, rising 6.9%.

The British electronics retailer said it expects its annual profit to land at the top end of its forecast range, supported by market share gains across key consumer categories.

In contrast, shares of B&M fell 3.6% after the discount retailer announced that interim Chief Financial Officer Helen Cowing had stepped down after less than five months in the role.

Wizz Air saw one of the sharpest gains, surging 9.7%.

The rally followed a Bloomberg report indicating that Ukraine’s top negotiator with Russia had observed progress toward a potential peace agreement.

Outlook remains cautiously optimistic

Overall, UK markets appear set to close the week on a positive note, buoyed by easing oil prices earlier in the week and hopes of diplomatic progress.

However, persistent geopolitical tensions and the upcoming US inflation data continue to cast a degree of uncertainty over the outlook.

Investors are likely to remain cautious as they assess incoming economic data and monitor developments from the Middle East, both of which could shape market direction in the days ahead.