London equities opened firmer on Friday, with the FTSE 100 up 0.35% at the start of trading, even as official data showed British retail sales fell by the most in nearly a year in April.
The official retail figures published on Friday underscored signs of weakening consumer spending amid the backdrop of the Iran war and rising energy costs. A separate survey cited in the data release indicated that, although consumers were less downbeat this month, they remained the least willing to make major purchases in almost a year and a half.
Smaller-cap stocks outperformed, with the FTSE 250 rising 0.65% as market attention focused on Softcat. The Computer Services & IT Consulting firm issued a third-quarter trading statement reporting continued double-digit growth in both gross profit and operating profit. Management said growth was broad-based, particularly across the corporate sector, driven by demand for AI-enabled infrastructure. The company also noted an acceleration of customer orders as clients move to secure inventory ahead of potential shortages in global memory chips.
As a result of those trends, Softcat raised its full-year guidance, with management now expecting mid-teens growth in underlying operating profits - an upgrade from its prior expectation of high single-digit growth.
Market participants were also attentive to developments around the Iran conflict. U.S. Secretary of State Marco Rubio was quoted as saying there had been "some good signs" in talks aimed at ending the nearly three-month-old war, comments that traders interpreted as a cautiously hopeful signal. Rubio additionally said any agreement that involved Iran imposing a toll system in the Strait of Hormuz would be unacceptable. Separately, Iran’s Supreme Leader ordered that the country’s near-weapons-grade uranium should not be sent abroad.
On the currency front, the pound traded slightly softer, with GBP/USD down about 0.1% on Friday.
The market reaction combined corporate fundamentals - led by Softcat’s AI-driven demand and upgraded profit outlook - with macro and geopolitical headlines that continue to temper investor sentiment. The juxtaposition of faltering retail activity and a technology-led earnings beat illustrates divergent forces affecting UK markets this session.