The FTSE 100 opened lower on Friday, with investor sentiment dampened by elevated oil prices and ongoing geopolitical tensions in the Middle East, overshadowing stronger-than-expected UK retail data.
By 07:18 GMT, the UK’s benchmark index had declined 0.5%, while sterling edged down 0.04% against the US dollar to 1.3468. Elsewhere in Europe, Germany’s DAX slipped 0.14%, and France’s CAC 40 dropped 0.7%, reflecting broader caution across regional markets.
Concerns intensified after Donald Trump signalled there was no immediate urgency to resolve tensions with Iran, raising expectations of a prolonged standoff. He indicated that Iran’s military and economic capabilities had been significantly weakened and stated that the United States would continue to exert control over the Strait of Hormuz until an agreement is reached, while also leaving open the possibility of further military action. These developments have heightened fears of ongoing disruption to global energy supplies.
Oil prices remained near recent highs following a sharp rally earlier in the week, supported by concerns over supply constraints linked to the Strait of Hormuz. The waterway, historically responsible for roughly one-fifth of global oil shipments, has experienced reduced traffic amid heightened military activity, adding to worries about sustained upward pressure on energy costs.
UK Retail Sales Surprise to the Upside
Data from the Office for National Statistics showed that UK retail sales rose by 0.7% in March, exceeding expectations for a more modest increase. On an annual basis, sales grew by 1.7%.
However, underlying trends remained mixed. Core retail sales excluding fuel posted only modest growth and fell short of yearly forecasts, suggesting that while headline figures were encouraging, consumer demand remains uneven.
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