Key insights
- UK stocks declined as a second consecutive monthly fall in house prices, coupled with escalating Middle East tensions impacting oil prices, weighed on sentiment. Higher borrowing costs due to inflation expectations are straining affordability. The geopolitical risk surrounding the Strait of Hormuz and potential supply disruptions for crude oil add to global economic uncertainty, indirectly influencing broader market risk appetite.
Investing.com -- British stocks edged lower on Friday trading as a fresh batch of domestic data underscored the weight of Middle East uncertainty on the UK economy, with the Halifax House Price Index showing average property values slipping for a second consecutive month to £298,806 in May, down 0.1% on the month and up just 0.5% on the year.
As of 03:20 ET (07:20 GMT), the FTSE 100 dipped 0.23%, while sterling held broadly steady at 1.3439 against the dollar, up just 0.08%. Germany’s DAX was down 0.34%, while France’s CAC 40 slipped by 0.07%.
The Halifax data provided the session’s domestic anchor. Amanda Bryden, Head of Mortgages at Halifax, said "property price trends continue to reflect the uncertainty linked to developments in the Middle East," adding that "higher inflation expectations have kept borrowing costs above the level seen at the start of the year, continuing to stretch affordability for many buyers."
Britain’s north-south housing market divide widened further, with house prices in Northern Ireland rising 7.8% year-on-year, the strongest growth of any UK region, while prices in London fell 1.5% to £534,375 and declined 2.1% in South East England to £382,704.
The housing data landed against a backdrop of escalating energy risk, with Brent crude hovering around $95 a barrel and on course for a weekly gain of more than 3% after an explosion near Oman’s Mina al Fahal oil terminal briefly halted loading at the country’s main crude export facility.
If sustained through Friday’s close, the advance would snap a two-week losing streak for Brent.
Oman’s state news agency later said operations had resumed normally, citing Petroleum Development Oman, though Omani authorities provided no details on the cause.
Reuters had earlier reported the blast near the terminal’s single-buoy mooring berths was believed to have been caused by a drone attack.
The broader energy complex remains sensitive to any signal from the Strait of Hormuz. Iran’s crude exports collapsed 84% in May compared with the prior month, and 87% below their 12-month average, according to Lloyd’s List, as U.S. pressure on Tehran’s shipping network intensified. Iran’s parliament deputy speaker Hamidreza Haji-Babaei said lawmakers had reviewed a plan to regulate ship traffic through the strait and that a "powerful resolution" would be approved, without disclosing terms.
On the diplomatic front, Iranian Foreign Minister Abbas Araghchi said "no tangible progress" had been made in negotiations with Washington, though message exchanges had not been fully severed.
Araghchi also dismissed U.S. President Donald Trump’s remarks about a potential meeting with Iran’s supreme leader Mojtaba Khamenei, saying the issue should be viewed "in the real world."
Trump, speaking from the Oval Office on Thursday, said he had considered sending special operations forces to retrieve Iran’s highly enriched uranium stockpile but rejected the idea, citing the risk of a prolonged mission inside a war zone.
In Lebanon, the fragile ceasefire framework negotiated in Washington remained on life support after Hezbollah’s secretary-general Sheikh Naim Qassam categorically rejected its terms, calling the deal "a roadmap for the destruction of part of the Lebanese people."