London markets are poised for a positive start on Friday after easing geopolitical tensions in the Middle East lifted global investor sentiment and pushed oil prices sharply lower.
Futures indicate the FTSE 100 will open around 81 points higher, extending Thursday’s gains after the index closed at 10,303.88.
The improvement in risk appetite follows comments from US President Donald Trump, who suggested a deal with Iran to end the conflict could be finalised within days. Trump withdrew earlier threats of further military action and said key elements of a proposed agreement had already been approved by the US and regional allies, including Israel.
While Iranian officials have not yet confirmed a final agreement, the prospect of de-escalation has helped calm energy markets. Brent crude fell to around $88 a barrel from nearly $93 the previous day, easing concerns over potential disruption to supplies through the Strait of Hormuz.
The reduction in geopolitical risk sparked a strong rally on Wall Street overnight. The Dow Jones rose 1.9%, the S&P 500 gained 1.8% and the Nasdaq surged 2.5%, with Asian markets following suit on Friday morning.
Japan’s Nikkei climbed 3.5%, Hong Kong’s Hang Seng rose 1.9%, while Australia’s ASX 200 advanced 1.8%.
Meanwhile, attention will also focus on what is expected to be the biggest IPO in market history as SpaceX begins trading on Nasdaq. The company has priced its shares at $135, valuing the business at just under $1.8 trillion and raising a record $75 billion.
Back in the UK, housing market data from Rightmove showed buyer demand rebounding in early June after a temporary slowdown caused by May’s heatwave. Activity has now returned to normal seasonal levels and is running ahead of pre-heatwave trends.
Investors will also be monitoring UK GDP, industrial production and trade balance figures later today, alongside inflation data from both France and Germany.
With oil prices falling, global equities rallying and hopes of a diplomatic breakthrough in the Middle East improving sentiment, markets are ending the week on a much stronger footing than many expected just a few days ago.
