London midday: FTSE pares gains as oil creeps up; Wetherspoons slide

(Sharecast News) - London stocks had pared earlier gains by midday on Friday as oil prices crept higher, having fallen after Israeli Prime Minister Netanyahu said the war with Iran could end sooner than people think. The FTSE 100 was up 0.2% at 10,081.36. At the same time, Brent crude was down 0.7% at $107.91 a barrel and West Texas Intermediate was 1% lower at $95.15.

Oil prices were creeping back up again, having eased after Netanyahu said at press conference on Thursday that Iran's ability to enrich uranium and produce ballistic missiles had been destroyed, and that the regime was "cracking" as a result of the US-Israel attacks.

He also rejected the possibility of a lengthy campaign. While insisting he was "not putting a stopwatch" on the conflict, he said: "I see this war ending a lot faster than people think. In war you have to grit your teeth."

Netanyahu also said he would refrain from any further attacks on Iran's South Pars gas field at Donald Trump's request.

Nevertheless, the backdrop remained tense as Iran continued missile attacks against fellow Gulf states on Friday, with Kuwait saying an oil refinery had been hit.

Stephen Innes, managing partner at SPI Asset Management, said: "Netanyahu's remarks have poured a layer of soothing balm over sentiment, with talk of securing the Strait and claims that Iran's nuclear and missile capabilities have been neutralised, feeding the idea that this conflict could burn out faster than feared.

"That narrative matters because it shortens the perceived life of the supply shock. But even if the geopolitical chapter closes sooner than expected, the energy system does not reset on command. You do not rebuild liquefaction trains, repair export terminals, or restore confidence in global shipping lanes with a press conference. So with Brent still holding above $105, the tape may be calmer, but you can still smell the smoke."

Meanwhile, Susannah Streeter, chief investment strategist at Wealth Club, said crude prices "remain highly volatile".

"They have dropped from the worrying highs reached yesterday but remain well above $100 per barrel, with Brent crude currently trading at around $108 a barrel," she said. "Gas futures have also retreated but remain more than 10% higher than before attacks intensified on energy facilities in the Middle East this week.

"Traders are still assessing the cost of the damage inflicted on Qatar's Ras Laffan complex, which is responsible for around a fifth of global LNG supplies. The damage could take years to repair, which is why these sharply higher prices may persist."

On home shores, figures from the Office for National Statistics showed the government borrowed more than expected in February.

Borrowing rose to £14.3bn, up £2.2bn from a year earlier and marking the second highest level for that month since records began. It was also well above the £8.5bn expected by economists.

Borrowing in the financial year to February was £125.9bn, down 8.7% on the same 11-month period a year ago, but still the fourth-highest April to February borrowing on record.

ONS senior statistician Tom Davies said: "Borrowing was higher than the same month last year and was the second-highest February figure on record. While receipts were up on last year, that was outweighed by a rise in spending, including the later timing of some debt interest payments.

"However, across the first eleven months of this financial year as a whole, borrowing was down, as receipts increased by more than spending."

Investors were also mulling the latest survey from the Confederation of British Industry, which showed that manufacturing output across the UK is expected to stabilise over the coming three months, following a fall in activity over the first quarter.

In equity markets, airlines flew higher, with easyJet and BA and Iberia owner IAG both up sharply as oil prices retreated.

Unilever gained as it confirmed it was in talks to separate its food business and combine it with spice maker McCormick. If successful, the deal would see brands such as Unilever's Hellmann's mayonnaise and US-based McCormick's Cholula hot sauce brought together.

Spire Healthcare surged following a report that private equity firm Bridgepoint is drawing up proposals for a formal offer worth £1bn. According to Sky News, the former owner of Oasis Healthcare, the dentistry chain previously run by Spire's chief executive, Justin Ash, is formulating plans to launch a bid for Spire Healthcare Group worth around 230p a share.

Close Brothers jumped as Shore Capital upgraded the shares to 'buy' from 'hold', saying the selloff on the back of a research note by Viceroy was overdone.

On the downside, Smiths Group slumped as the diversified engineer reported a "solid" first-half, but the outlook disappointed.

Defence firms BAE Systems and Babcock were also lower, while JD Wetherspoons tumbled as it posted a steep drop in interim profits and warned that full-year numbers would likely disappoint, as it battled a spike in costs.

The British pub chain saw revenues rise 5.7% in the 26 weeks to 25 January, to £1.09bn, while like-for-like sales were 4.8% stronger.

However, operating profits tumbled 18.4% to £52.9m, missing forecasts for a more modest drop, to £60m.

BP, Shell, Harbour Energy, Ithaca and Energean all gushed lower as oil prices eased.