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Lunchtime market roundup: Stocks red as Israel-Iran tensions continue

Stock prices in Europe remained red on Friday midday with oil and gold prices enjoying a boost, while tensions between Israel and Iran continue to be high.

Total UK footfall decreased 1.7% on an annual basis in May compared with a 7.2% on-year jump in April, in what the British Retail Consortium called a ‘disappointing turn’ and a ‘slow start to summer shopping’.

Meanwhile, defence and oil stocks rose - as did the price of oil - following the Israel Defence Forces’ attack on Iranian nuclear facilities. Iranian Supreme Leader Ayatollah Ali Khamenei threatened Israel with ‘a bitter and painful fate’ in response. The Israeli military said Iran launched around 100 drones, which air defences intercepted, while neighbouring Jordan said it intercepted drones and missiles that violated its airspace.

More recently, Israel has launched a fresh attack on a key underground uranium enrichment facility in central Iran, Iranian state media reported.

In a letter to the United Nations, Foreign Minister Abbas Araghchi described Israel’s strikes as a ‘declaration of war’ and ‘called on the Security Council to immediately address this issue’.

Further, Iranian media reported on Friday that Israel had carried out a new wave of attacks on Iranian territory including on the cities of Tabriz and Shiraz and at the Natanz nuclear site.

US President Donald Trump urged Iran to ‘make a deal’, warning that there will be more ‘death and destruction’ after Israel launched deadly strikes targeting Iranian nuclear facilities.

Brent oil was quoted at $74.84 a barrel at midday in London on Friday, up from $69.66 late Thursday. Gold, meanwhile, was quoted higher at $3,412.12 an ounce against $3,388.71.

‘Concern about an escalating conflict in the Middle East saw oil hit its highest level since January and gold was also in demand for its safe haven qualities,’ AJ Bell’s Russ Mould said.

The FTSE 100 index was down 37.63 points, 0.4%, at 8,847.29. The FTSE 250 was down 255.61 points, 1.2%, at 21,131.08, and the AIM All-Share was down 3.68 points, 0.5%, at 762.20.

The Cboe UK 100 was down 0.4% at 881.87, the Cboe UK 250 was down 1.2% at 18,644.55. The Cboe Small Companies, however, was marginally higher at 17,060.68.

Aerospace and defence large-cap BAE Systems led the FTSE 100, up 2.9%. It was closely followed by oil majors BP and Shell, up 2.8% and 1.7%, and precious metal miners Fresnillo and Endeavour which gained 1.0% and 1.7%.

Still, as Mould put it, ‘The FTSE 100 did not have long to bask in the glory of reaching a new record close last night with Israel’s military strikes on Iran putting stocks on the back foot globally.’

The chief laggers were International Consolidated Airlines and easyjet, which lost 4.9% and 3.7% as fuel costs look set to rise due to the above-mentioned geopolitical turmoil.

Also, travel-related stocks are under pressure following the fatal crash on Thursday of a London-bound Air India flight. There appeared to be ‘no survivors’, AFP has reported.

FTSE 250-listed exploration and production company Energean, which has assets in Israel, was down 5.1%. Airline Wizz Air has lost 4.5%.

Meanwhile, among small caps, Blencowe Resources jumped 13%.

The mineral explorer and developer said testwork for graphite, from its Orom-Cross asset in Uganda, is continuing as part of the EU-funded Safeloop programme.

Travel retailer On The Beach was down 0.8%.

In European equities on Friday, the CAC 40 in Paris was down 1.2%, while the DAX 40 in Frankfurt was down 1.5%.

The eurozone’s trade surplus and industrial output were both worse than anticipated in April, data published by Eurostat showed Friday.

Annual growth in industrial output slowed to 0.8% in April from 3.7% in March, harsher than the slowdown to 1.4% that had been anticipated by the FXStreet-cited consensus. Monthly industrial output fell by 2.4% in April, worse than the consensus of a 1.7% decline.

Meanwhile, the eurozone’s trade surplus dived 27% to €9.9 billion in April from €13.6 billion a year prior. This was far worse than an expected on-year improvement in the surplus to €18.2 billion.

The pound was quoted lower at $1.3534 at midday on Friday in London, compared to $1.3586 at the equities close on Thursday. The euro stood at $1.1504, lower against $1.1575. Against the yen, the dollar was trading at JP¥144.36, higher compared to JP¥143.71.

Stocks in New York were called lower. The Dow Jones Industrial Average was called down 1.1%, the S&P 500 index down 1.1%, and the Nasdaq Composite down 1.4%.

Boeing was down 1.2% pre-market. It closed down 4.8% on Thursday after the crash of Air India Flight 171, a Boeing 787-8 Dreamliner aircraft.

AFP reported that Boeing’s Chief Executive Kelly Ortberg has cancelled his trip to next week’s Paris Air Show, a major aviation industry event, to focus on the investigation into the crash.

The yield on the US 10-year Treasury was quoted unchanged at 4.38%. The yield on the US 30-year Treasury was quoted at 4.86%, narrowing from 4.87%.

‘Later we will get a fresh reading of US consumer sentiment, to see if the recent improvement, as tariff fears eased, has been sustained,’ AJ Bell’s Mould noted.

Meanwhile, US President Donald Trump urged Iran on Friday to ‘make a deal’ after Israel launched deadly strikes targeting Iranian nuclear facilities.

‘There has already been great death and destruction, but there is still time to make this slaughter, with the next already planned attacks being even more brutal, come to an end,’ Trump said on his Truth Social platform.

‘Iran must make a deal, before there is nothing left... JUST DO IT, BEFORE IT IS TOO LATE,’ he added.

Trump also told Fox News he had prior knowledge of the Israeli strikes, adding that Tehran ‘cannot have a nuclear bomb’.

The conflict has raised questions on whether a sixth round of talks planned between the US and Iran will still take place on Sunday in Oman. Trump said Washington is still ‘hoping to get back to the negotiating table’.

Still to come on Friday’s economic calendar, Canada has manufacturing sales due for the afternoon, followed by the US Michigan consumer sentiment index.

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