London's FTSE 100 eyes third weekly loss amid doubts over Middle East ceasefire

UK's FTSE 100 slipped on Friday as fresh clashes in the Gulf raised fears over a fragile month-long U.S.-Iran ceasefire, while investors digested early local election results showing heavy losses for Prime Minister Keir Starmer's ‌Labour Party. The blue-chip FTSE 100 index fell 0.1% to 10,261.38 points by 0947 GMT, and was set for a ‌third consecutive weekly fall. The midcap FTSE 250 rose 0.2%, up for the third straight day.

* Starmer said he would not resign after early results showed populist Reform UK party of Brexit campaigner Nigel Farage gained more than 350 council seats in England. * The results highlighted the splintering of Britain's two-party system ⁠into ​a multi-party democracy, a historic political ⁠shift, analysts said.

* "Risks of a leadership challenge can rise post the May local elections, though it is not a given," strategists at Bank of America said ⁠in a note, adding "if a leadership challenge were to ensue, and a left-leaning Labour leader were to emerge, risks of higher borrowing would ​increase." * The British pound firmed, weighing on shares of UK multinationals that earn a large share of revenue abroad.

* ⁠British Airways owner IAG fell 2.1% after warning its annual profit would be lower than forecast and flagged that jet fuel costs would be about ⁠2 ​billion euros higher in 2026 than in 2025 due to the conflict. * Intertek shed 3% after rejecting a third sweetened 8.93 billion pound ($12.12 billion) takeover proposal from Swedish private equity firm EQT AB.

* Global risk sentiment was fragile after the ⁠U.S. and Iran exchanged fire in the Middle East, even as U.S. President Donald Trump played down the hostilities. Oil prices rose ⁠back above $100 a barrel. * ⁠Domestic data showed British house prices fell in April for the second straight month as concerns about the impact of the war in Iran hurt buyer demand.

* Focus will shift to ‌the U.S. jobs ‌report later in the day. ($1 = 0.7368 pounds)

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