The FTSE 100 closed sharply higher on Friday, lifted by renewed optimism over a potential US-Iran nuclear deal and the historic market debut of SpaceX (SPCX).
London’s blue-chip index finished up 167.84 points, or 1.6%, at 10,471.72, capping a positive week for UK equities across the board.
The FTSE 250 also gained 355.07 points, or 1.6%, to close at 23,325.71, while the AIM All-Share surged 2.1% to 787.33.
“Investors were in a buoyant mood as hopes of a peace deal between the US and Iran were revived, having seemingly dropped off the table earlier in the week,” said Dan Coatsworth, head of markets at AJ Bell (AJB.L).
Late Thursday, US President Donald Trump said he had called off “very hard” strikes on Iran that had been due to take place overnight and claimed a deal had been agreed.
Trump added that Iran’s supreme leader had approved the text and that the time and place of the signing would be “announced shortly”.
Iranian Foreign Minister Abbas Araghchi said on Friday that the US and Iran have “never been closer” to a deal, writing on X that “the Islamabad Memorandum of Understanding has never been closer.”
White House officials said Iran has agreed to dismantle its nuclear programme and destroy nuclear material under the deal, while Tehran also agreed to open the Strait of Hormuz.
Brent crude for August delivery fell sharply to 87.00 dollars a barrel on Friday, down from 92.95 dollars at Thursday’s London equities close, reflecting easing tensions.
Coatsworth cautioned that “whether momentum can be sustained depends on positive noises about a resolution translating into something more solid in the coming days.”
Across the Atlantic, the biggest story was the long-awaited stock market debut of Elon Musk’s SpaceX (SPCX), described as the largest initial public offering in history.
SpaceX raised 75 billion dollars by selling 555.6 million shares at 135 dollars apiece, giving the reusable rocket company a valuation of 1.77 trillion dollars, or £1.33 trillion.
That valuation makes SpaceX the seventh most-valuable US company, placing it ahead of Tesla, Musk’s electric vehicle manufacturer.
Shares were trading at around 162 dollars per share as dealing began, a sharp premium to the IPO price, with investor enthusiasm proving difficult to contain.
Kathleen Brooks, research director at XTB, said there is “so much enthusiasm for SpaceX right now, that it is hard to see the shares slipping any time soon.”
Brooks added: “The IPO is a roaring success, and SpaceX will change the landscape of US stock markets. It will also shift the AI trade from chip stocks to imagining an AI-infused reality.”
Scottish Mortgage Investment Trust, which holds a stake in SpaceX, saw its own shares rise 1.7% in London on the back of the landmark debut.
Back in the UK, the ONS reported that the economy contracted by 0.1% in April, in line with forecasts, with Deutsche Bank analyst Sanjay Raja saying the conflict is “slowly but surely catching up with the UK.”
Oil majors BP and Shell missed out on the broader rally as crude prices dropped, falling 2.0% and 1.7% respectively, with Shell also announcing a pause in its three billion-dollar share buyback programme until mid-July.
Looking ahead, next week brings interest rate decisions from central banks including those in the US, UK, Australia, Japan and Switzerland, along with UK inflation and unemployment figures.