Britain’s FTSE 100 index experienced a rise on Friday, driven by gains in commodity-related stocks, although banking shares struggled following NatWest’s downgrade in profit outlook.
Despite this, the benchmark index was on track for its second consecutive weekly decline.
The FTSE 100, with a focus on commodities, saw a 0.3% increase by 0835 GMT. On the other hand, the mid-cap FTSE 250 managed to break a three-day losing streak, climbing by 0.6%.
However, it was still heading for its sixth consecutive weekly decline.
Heavyweight oil and gas companies within the FTSE 100 surged by 2% due to a $1 increase in oil prices, driven by concerns about the Israel-Hamas conflict, which could potentially impact global supply.
Precious metal miners also saw gains, with a 2.2% jump in response to higher gold prices, as investors sought the safety of bullion amid ongoing tensions in the Middle East. Industrial metal miners also contributed to the positive trend, adding 1.3%.
Giles Coghlan, Chief Market Analyst at GCFX Ltd, noted, “Markets are starting to get a little bit used to the conflict… One wants to hold risk over the weekend, particularly with the escalation in geopolitical events, so we see stocks being sold.”
Global investor sentiment received a boost from a significant decline in long-term U.S. Treasury rates.
However, NatWest (NWG.L) experienced a notable setback, with its shares falling by 10.5% and ranking at the bottom of the FTSE 100.
This marked their largest one-day drop since the Brexit vote in June 2016.
The British lender downgraded its outlook due to increased competition for savers’ cash, leading to a 0.4% loss in the banks index.
In contrast, IAG (ICAG.L) surpassed expectations with a strong third-quarter profit.
Still, the owner of British Airways expressed concerns about economic uncertainties and uncertainties surrounding the impact of the Middle East turmoil on bookings and jet fuel costs into the next year. As a result, shares of IAG slipped by 0.4%.
On the central banking front, the European Central Bank maintained its interest rates as expected, while the Bank of England is also anticipated to announce a pause in rate hikes during the central bank’s policy meeting next week.