(Alliance News) - The FTSE 100 closed down on Friday, but above early lows, while the oil price fell amid reports that Iran has made a new proposal amid stalled US peace talks.
The FTSE 100 closed down 14.89 points, 0.1%, at 10,363.93. It had earlier traded as low as 10,294.20.
The FTSE 250 ended up 66.46 points, 0.3%, at 22,531.61, and the AIM All-Share rose 2.57 points, 0.3%, at 796.66.
For the week, the FTSE 100 was down 0.1%, the FTSE 250 was down 0.2%, and the AIM All-Share was up 0.2%.
The Cboe UK 100 ended up slightly at 1,034.43, the Cboe UK 250 was 0.2% higher at 19,588.05, and the Cboe Small Companies Index ended up 0.4% at 18,166.51.
According to AFP, Iran delivered a new proposal for peace talks with the US via mediator Pakistan, citing Iranian state media, with negotiations between the two sides frozen despite a weeks-long ceasefire.
The text of Iran's proposal was handed to Islamabad on Thursday evening, the IRNA news agency reported. The report saw oil prices fall sharply, although they remain elevated compared to pre-war levels.
Brent crude for June delivery was trading at USD108.86 a barrel on Friday, down compared to USD114.38 at the time of the equities close in London on Thursday.
The White House declined to comment on the IRNA report.
"We do not detail private diplomatic conversations," deputy press secretary Anna Kelly said in a statement sent to AFP. "President [Donald] Trump has been clear that Iran can never possess a nuclear weapon, and negotiations continue to ensure the short- and long-term national security of the US."
In New York, markets were higher amid earnings optimism. The Dow Jones Industrial Average was up 0.1%, the S&P 500 was 0.6% higher, and the Nasdaq Composite was up 1.1%.
UBS said: "With the first-quarter US earnings season more than halfway through, both results and forward guidance have been good. Earnings are on track to grow by 17%.
"Tech is leading the way, but earnings growth is broadening, supported by resilient consumer spending and signs of a cyclical upswing. The number of companies beating expectations is above the average, and the size of earnings beats is above the median."
Financial markets in France and Germany were closed for Labour Day.
The yield on the US 10-year Treasury was unchanged at 4.38% on Friday compared to Thursday. The yield on the US 30-year Treasury was at 4.97% on Friday, narrowed from 4.98% a day earlier.
The pound firmed to USD1.3626 on Friday afternoon from USD1.3588 on Thursday. Against the euro, sterling was flat at EUR1.1578.
The euro traded higher against the greenback, rising to USD1.1765 on Friday from USD1.1731 on Thursday. Against the yen, the dollar was trading at JPY156.74, higher than JPY156.65.
In London, figures showed UK manufacturing growth exceeded expectations in April despite the Middle East crisis.
According to S&P Global, the manufacturing purchasing managers' index rose to a 47-month high of 53.7 from 51.0 in March, beating both the flash estimate of 53.6 and remaining comfortably above the 50 mark that separates growth from contraction.
S&P Global said part of the strength reflected clients bringing forward purchases to avoid anticipated price rises.
However, business optimism fell to its lowest level in a year, as concerns over the US-Israel war with Iran weighed on confidence.
Further data from the Bank of England showed that UK net mortgage approvals unexpectedly rose in March. Net approvals for house purchases increased to 63,500 from 62,700 in February, ahead of the FXStreet-cited consensus for a decline to 60,000.
The figures followed earlier data from Nationwide Building Society, which showed UK annual house price growth accelerating to 3.0% in April from 2.2% in March, ahead of expectations for an unchanged reading.
RBC Capital Markets analyst Anthony Codling said the UK housing market is doing something "rather impressive right now: ignoring the bad news".
"Despite a sharp fall in consumer confidence, a deteriorating outlook for household finances, and a notable weakening in buyer enquiries, house prices in April kept climbing," he noted.
Housebuilders Berkeley Group and Barratt Redrow took heart from the data, with share prices up 1.7% and 0.7% respectively.
But lender NatWest was in the doldrums, falling 3.4%, after reporting higher first-quarter profit but flagging a softer-than-expected income outlook.
The Edinburgh-based lender expects 2026 income at the top end of its GBP17.2 billion to GBP17.6 billion range, below the market consensus of GBP18.0 billion.
Citi analyst Andrew Coombs said he was not surprised by the market reaction but believes this misses the bigger picture.
"NatWest has reported better loan and deposit growth than peers, is seeing healthy [net interest margin] progression, has been disciplined on costs and the underlying cost of risk is running well below full-year guidance," he pointed out.
Coombs expects NatWest will comfortably surpass its updated full-year revenue guidance, helped by the strong volume growth, better structural hedge growth and higher reinvestment yields.
MJ Gleeson rose 8.5% as it said that Gleeson Homes traded resiliently amid modest build cost inflation since the start of 2026.
The Sheffield, England-based housebuilder said Gleeson Homes, since February 11, "has experienced resilient trading through the period", citing the 11 weeks to April 24.
MJ Gleeson noted modest build cost inflation since the start of 2026, while underlying selling prices on open-market and partnership sales have been broadly stable.
"Protecting margin continues to be a priority," the firm said.
Among small caps, ProService Building Services Marketplace, formerly known as HSS Hire, slumped 15% after forecasting lower-than-hoped financial figures.
The firm expects revenue of around GBP248 million in the financial year to March, below market consensus of GBP260 million, and breakeven adjusted earnings before interest, tax, depreciation and amortisation, in line with expectations.
For financial 2027, the firm now expects underlying Ebitda between GBP9 million and GBP12 million, below the market consensus of GBP19.6 million.
The company said slower-than-anticipated progress in ramping up the supply agreements with Speedy Hire, alongside broader macroeconomic pressures, particularly within the UK construction sector, has weighed on demand across parts of the group's end markets.
Gold traded higher at USD4,637.78 an ounce on Friday, from USD4,616.72 on Thursday.
The biggest risers on the FTSE 100 were DCC, up 265.00p at 5,805.00p, Entain, up 24.20p at 567.80p, ICG, up 64.00p at 1,879.00p, Metlen Energy & Metals, up 1.16p at 37.08p, and Pearson, up 33.50p at 1,115.00p.
The biggest fallers on the FTSE 100 were NatWest, down 19.60p at 565.50p, AstraZeneca, down 436.00p at 13,512.00p, United Utilities, down 40.50p at 1,416.50p, Endeavour Mining, down 116.00p at 4,298.00p and Severn Trent, down 72.00p at 3,197.00p.
Monday's global economic calendar has eurozone manufacturing PMI data and US factory orders figures. Financial markets in the UK are closed for the May Bank Holiday.
Next week's local corporate calendar has first-quarter results from Asia-focused lender HSBC, oil major Shell and a trading statement from retailer Next.
By Jeremy Cutler, Alliance News reporter
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