UK shares clock weekly gains as Iran-US peace deal hopes push oil price lower
By Tharuniyaa Lakshmi and Shashwat Chauhan
Market Performance and Economic Impact
FTSE Indexes Rally Amid Peace Deal Hopes
June 12 (Reuters) - UK shares gained in a broad-based rally on Friday amid growing hoping of a peace agreement between Iran and the U.S., which sent crude oil prices lower, with both the midcap and blue-chip indexes clocking weekly gains.
The blue-chip FTSE 100 index closed 1.6% higher at 10,471.7 points, its highest closing level since May 27. The midcap FTSE 250 also jumped 1.6% — its best single-day percentage gain in over five-weeks.
Weekly Gains Across Indexes
• Both indexes also clocked an over 1% gain for the week.
Iran-US Peace Deal Developments
• A Western source told Reuters that if language could be agreed upon, the memorandum could be signed as soon as Sunday by U.S. Vice President JD Vance and Iran's parliament speaker, Mohammed Baqer Qalibaf, with Geneva for now seen as the likeliest venue.
Sector Performance Breakdown
Energy and Oil Price Movements
• Most FTSE 350 sub-indexes were in the green, except energy, which fell 1.8% after oil prices slipped more than 3%.
Travel, Leisure, and Airline Stocks
• The travel and leisure sub-index, which includes oil price-sensitive airlines, also advanced 3.9%. British Airways owner IAG and budget carrier Wizz Air Holdings were among the top gainers.
Banking and Defence Sectors
• Heavyweight banks jumped 4.2%, while aerospace and defence added 2.2%.
Company-Specific Movements
• McBride slid 14.6% after the private-label cleaning products maker warned profits over the next two years would fall short of expectations.
UK Economic Indicators
GDP Contraction
• Britain's economy contracted 0.1% in April, its first monthly drop since August 2025, the Office for National Statistics (ONS) said.
Analyst Insights
• "We had anticipated a growth slowdown in response to the energy shock, and the April data are starting to hint at that. We expect more weakness in consumer-related spending to come as inflation moves higher and restrains real incomes," J.P. Morgan analysts said in a note.
Inflation Expectations
• Separately, the British public's expectations for inflation in the long term rose to a record high last month, the Bank of England's quarterly inflation attitudes survey showed on Friday.
Reporting Credits
(Reporting by Tharuniyaa Lakshmi and Shashwat Chauhan in Bengaluru; Editing by Sahal Muhammed and Joyjeet Das)
