Man with folded arms over chart of FTSE 100 ©Shutterstock
The FTSE 100 advanced on Friday as oil prices declined following comments from US President Donald Trump ruling out military strikes against Iran before the November midterm elections, while gains in metals prices supported shares of major mining companies.
London’s benchmark index was up 0.80% at 07:18 GMT, while European markets also moved higher. Germany’s DAX gained 0.77% and France’s CAC 40 increased 0.76%.
Sterling strengthened 0.07% against the US dollar to trade at $1.3240.
Mining stocks were among the strongest performers on the FTSE 100, supported by increases in precious and industrial metals prices.
Antofagasta (LSE:ANTO) led the index’s gainers with an advance of 3.4%, while Fresnillo (LSE:FRES), Glencore (LSE:GLEN), Anglo American (LSE:AAL) and Endeavour Mining (LSE:EDV) recorded gains ranging from 1.6% to 3.3%.
US gold futures increased 1.45% to $4,217.26 an ounce, while spot gold rose 1.43% to $4,192.73.
Copper prices on the London Metal Exchange gained 1.22%, and silver advanced 2.1%, providing additional support to shares of companies involved in base and precious metals production.
Oil prices moved in the opposite direction as investors assessed the potential implications of the latest developments involving Washington and Tehran.
Brent crude futures declined 0.7% to $103.54 a barrel, while US West Texas Intermediate futures fell 0.55% to $91 a barrel.
In a social media statement late on Thursday, Trump said the United States would not launch attacks against Iran before the midterm elections, referring to ongoing discussions with Tehran.
The president also indicated that the existing blockade would remain in place and claimed that 22 million barrels of oil had passed through the Strait of Hormuz during the previous night. The reported volume was not independently verified in the supplied information.
Despite the president’s comments, reports indicated that US military planning for potential operations against Iran had continued.
The New York Times reported, citing unnamed officials, that the Pentagon had prepared plans for a three-day campaign targeting Iranian missile and drone capabilities, energy infrastructure and command facilities.
The reported planning does not establish that any military operation has been authorised, and Trump has repeatedly rejected a return to major combat operations.
Separately, Saudi central bank governor Ayman Al-Sayari said the country’s East-West Pipeline had helped maintain oil supplies despite disruptions affecting the Strait of Hormuz and the Red Sea.
Pakistan’s Prime Minister Shehbaz Sharif also condemned reported Houthi attacks on airports in Saudi Arabia.
Iranian officials provided further comments on maritime activity in the region.
Ali Mohammadi, political deputy of the Islamic Revolutionary Guard Corps Navy, told the Fars news agency that Iranian forces were conducting nightly operations in the Strait of Hormuz against vessels considered by Tehran to be in breach of its rules.
Mohammadi also disputed estimates suggesting that between 3 million and 8 million barrels of oil were passing through the waterway.
Iranian Foreign Minister Abbas Araghchi said Tehran expected to respond to US proposals within the next few days, indicating that diplomatic exchanges between the two countries were continuing.
The developments left investors assessing the prospects for further diplomatic engagement alongside the continuing restrictions on maritime activity and uncertainty surrounding regional security.
For UK equities, Friday’s early gains were led by mining companies benefiting from higher metals prices, while lower crude oil prices coincided with reduced immediate concerns about additional military action.
Further movements in energy prices and European equity markets are likely to remain sensitive to developments involving Iran, shipping through the Strait of Hormuz and the progress of discussions with the United States.