FTSE 100 rises as HSBC gains lift financial stocks amid Middle East tensions

Britain's FTSE 100 index rose on Friday, supported by gains in HSBC Holdings that lifted financial stocks.

Investors also monitored rising oil prices and escalating tensions in the Middle East.

The blue-chip FTSE 100 index rose 0.3% to 10,674.68 points by 1018 GMT.

The mid-cap FTSE 250 index also gained 0.3%.

Both indexes were on track to end the week higher.

Financial stocks were among the key drivers of the broader market advance.

HSBC shares rose 1.2% after Allianz agreed to acquire the lender's life insurance business in Singapore for S$2.7 billion ($2.1 billion).

The transaction comes as HSBC continues efforts to streamline its operations.

The lender is also focusing on its core Asian banking business.

Investment banks lead sectoral gains

Investment banks and brokerages gained 1.6%.

The sector led gains among the major industry groups.

3i Group was among the strongest performers on the benchmark FTSE 100 index.

Its shares rose 3.1% after UBS raised its target price for the investment company to 3,200 pence from 2,900 pence.

The move helped support broader gains in financial stocks.

Investors continued to assess individual company developments alongside wider economic and geopolitical risks.

The rise in UK equities came as markets also monitored developments in the Middle East.

Escalating tensions in the region remained a key focus for investors.

Middle East tensions remain in focus

On the geopolitical front, US President Donald Trump promised "major military punishment" for Iran and its Houthi allies.

The development heightened concerns about possible disruptions to energy flows.

It also raised fears of a broader regional conflict.

Despite the geopolitical concerns, oil prices retreated.

The decline in oil prices weighed on energy stocks.

The energy sector fell 1.1%.

BP shares declined 1.6%, while Shell shares dropped 0.9%.

The moves in energy stocks came as investors continued to balance geopolitical risks with developments in the oil market.

The sector remained under pressure even as concerns about regional energy supply disruptions persisted.

New US tariffs add to market focus

Investors were also assessing developments in global trade.

The United States imposed new tariffs of 10% and 12.5% on goods from 60 trading partners.

The tariff measures added another area of focus for markets.

Investors continued to monitor the potential impact of changes in international trade conditions.

The latest developments came alongside signs of improving activity in the UK economy.

UK retail sales rise in june

British retail sales increased unexpectedly in June, according to official data.

The figures added to evidence of a pickup in economic activity.

Warm weather and the soccer World Cup helped boost consumer spending during the month.

The stronger retail performance provided support for the broader economic outlook.

British firms also reported their first growth in three months in July.

The improvement came after a brief respite in the US-Iran war.

The business growth data offered another positive signal for the UK economy.

However, investors continued to assess the outlook against ongoing geopolitical and trade uncertainties.

discoverIE shares jump on earnings outlook

Among individual stocks, discoverIE was one of the strongest performers in the FTSE mid-cap index.

Shares in the electronics components maker rose 12.5%.

The stock moved to the top of the FTSE mid-cap index after the company said its annual earnings are expected to exceed market expectations.

The sharp rise in discoverIE shares added to the broader positive performance in UK equities.

The company joined HSBC and other financial stocks in supporting the day's gains.

Overall, the FTSE 100 remained higher on Friday, with financial stocks providing the main support.