Overview of Market Performance#
British stocks experienced a decline on Friday, with the FTSE 100 index falling by 0.8%. This drop occurred despite stronger-than-expected retail sales figures. Meanwhile, the British pound increased slightly against the U.S. dollar, reaching 1.3510.
Impact of Middle East Tensions#
The ongoing conflict with Iran has raised concerns in the financial markets. U.S. President Donald Trump indicated that there is no immediate plan to resolve the situation, which has led to expectations of a prolonged conflict. The U.S. has tightened its naval blockade in the region, resulting in the rerouting of 34 vessels and the seizure of two Iranian ships. Traffic through the crucial Strait of Hormuz has significantly decreased, with only five ships passing in the last 24 hours compared to a pre-war average of 140.
Oil Prices and Supply Concerns#
As military activity continues in the region, oil prices remain elevated. The Strait of Hormuz is vital for global oil supply, accounting for about 20% of it. The reduced shipping traffic raises concerns about potential energy price increases due to supply disruptions.
UK Retail Sales Performance#
On a positive note, UK retail sales rose by 0.7% in March, surpassing expectations. Year-on-year, sales increased by 1.7%. However, the underlying demand showed mixed results, with core sales excluding fuel falling short of yearly forecasts.
Company Highlights#
In corporate news, Mondi’s shares dropped over 11% after the packaging company reported lower-than-expected earnings for the first quarter, attributing the decline to reduced selling prices and rising energy costs. Conversely, Computacenter's shares surged by 14.5% following a strong first quarter driven by demand from hyperscale customers and successful AI-related projects, leading management to raise their profit outlook for the year.