FTSE 100 Opens Higher on Iran Truce Hopes; Brent $94.50, Defence Stocks Ease
The FTSE 100 opened up 0.5% at around 10,450 on Friday as Iran-truce-deal optimism lifted European and Asian equities. Brent crude fell 2% to $94.50 a barrel as the war-risk premium eased; the US 10-year Treasury yield steadied at 4.50%. Sterling firmed marginally to $1.3425. Defence stocks BAE Systems, Babcock and Melrose — which led Thursday’s session — gave back some gains. Oil majors BP and Shell were under pressure on the lower oil-price outlook. UK gilt yields are likely to give back further yesterday’s rise as inflation expectations re-anchor with the truce-hope narrative.
If the Iran deal is signed in the next 48-72 hours, Brent is expected to move into the $80-90 range and the FTSE 100 could test resistance at 10,697-10,724 — the early-to-mid-April highs. The 10-year gilt yield is currently 34 basis points off its 13 May 5.17% peak and would likely fall further on a signed deal. The Reeves cost-of-living package lands into a measurably easier macro backdrop on a signed deal; the Ofgem energy price cap rise of 13% from July (£221/year/household) would still take effect but the next quarterly reset would likely roll back the rise if Brent stays in the $80-90 range through mid-summer.