UK equities moved lower on Friday, with major indexes tracking weekly losses as investors reconciled fading hopes for a swift US-Iran truce and absorbed a cautionary message from the Bank of England about vulnerabilities in global share prices.
By 1005 GMT the blue-chip FTSE 100 was down 0.6% at 10,391.16, marking the index's likely first weekly decline in five weeks and erasing the gains recorded after the U.S.-Iran ceasefire was announced earlier this month. The midcap FTSE 250 declined 1.1%.
Market participants cited heightened tension in the Middle East after no progress was reported in negotiations to reopen the Strait of Hormuz, a key shipping lane. That uncertainty sent crude oil prices higher, a move that weighed on cyclical segments of the market.
- Travel and leisure fell 1.4% overall, with airline Wizz Air sliding 4.9%.
- Banks were under pressure: heavyweight lenders Barclays and HSBC both eased by more than 1%.
The Bank of England's Deputy Governor Sarah Breeden told the BBC that stock markets worldwide are expected to fall because current share prices do not fully reflect the many risks facing the global economy - a comment that added to selling pressure.
Sterling ticked up 0.1% following data showing British retail sales rose 0.7% in March. Nonetheless, major retailers have warned that ongoing tensions in the Middle East are likely to cloud their earnings outlook.
Within the FTSE 100, the personal care, drug and grocery cohort stood out among the few gainers, rising 0.5%, alongside pockets of strength in the energy and utilities sectors. Technology and services provider Computacenter jumped 9.9% after saying it expects to beat annual profit forecasts.
At the opposite end of the index, Mondi tumbled 8.2%, the largest drop in the FTSE 100, after the packaging company flagged rising costs linked to the Iran war.
Investors now face a mix of geopolitical uncertainty, commodity-driven sector rotation and central bank caution. Those dynamics pushed markets away from recent stability and into a more defensive posture as the week drew to a close.