FTSE 100 Live: London stocks recover as oil and gold climb on Iran tensions Proactive uses images sourced from Shutterstock

• FTSE 100 rises 60 points to 10,687
• Retail sales jump to 2-year high in January
• Asian markets mostly lower on Iran tensions

9.15am: More morning movers

Chemring Group (LSE:CHG) slipped 3.5% after a slower-than-expected start to the year, hit by production hiccups at its Tennessee plant. Despite this, the defence tech firm kept its full-year outlook unchanged, with a strong £1.364bn order book and new contracts, while CEO Michael Ord flagged solid growth potential from rising Nato and allied defence budgets. Read more 

Diageo PLC (LSE:DGE) jumped 1.8% to 1,813p on reports that new CEO Dave Lewis is planning a major shake-up of the executive team, trimming layers of management. The former Tesco chief, nicknamed “Drastic Dave,” faces the challenge of reviving the spirits giant amid sluggish demand and US tariff headwinds. Read more

Anglo American PLC (LSE:AAL) shares edged up 1% to 3,612p after reporting a slight rise in 2025 underlying EBITDA to $6.4bn and $1.8bn in cost savings, with copper and iron ore outperforming De Beers. CEO Duncan Wanblad hailed strong operational delivery, while the miner gears up for its proposed Anglo Teck merger with Canada’s Teck Resources. Read more

BlackRock Smaller Companies Trust jumped 4% to 1,433p after announcing a merger with Throgmorton, creating a £780m growth-focused trust—the UK’s largest in the sector. Investors can choose cash or shares, overlapping portfolios will be co-managed, fees cut to the sector’s lowest, and a five-for-one share split aims to make the trust more accessible to smaller investors. Read more

8.30am: Good news for the Chancellor 

The UK public sector started 2026 on a high note, recording a £30.4 billion surplus in January, well above last year’s £14.5 billion and ahead of economists’ expectations of £24 billion.

Strong tax receipts played a big role. Self-assessed Income and Capital Gains Tax brought in £46.4 billion, £10.5 billion more than January 2025, boosted in part by the usual January rush and fears of future tax hikes.

Borrowing for the financial year to January was £112.1 billion, down 11.5% from last year, while the public sector current budget showed a £40.9 billion surplus for the month.

Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said: "Good news for the Chancellor, but the pressure to spend will intensify."

Indeed, much of the surplus came from lower-than-expected interest payments and underspending, while other areas of spending were higher than forecast. With the government already committing an extra £5 billion to cover council special educational needs and disabilities (SEND) deficits and signalling faster defence spending, January’s strong numbers may only offer temporary relief.

January’s figures are encouraging, but economists warn the real test for the public finances will come later in the year, as spending pressures and upcoming local elections put the government’s fiscal plans under the spotlight.

8.15am: Footsie off to a flying start 

The FTSE 100 is off to a positive start, making up for some of yesterday's losses on the renewed US-Iran tensions. Shortly into the session, London's blue-chip index is up 29 points at 10,655.60, a gain of just over a quarter of a percent. 

Leading the gainers are St James's Place PLC (LSE:STJ) and Burberry Group PLC (LSE:BRBY), with gains of 3.8% and 2.8% respectively. The Sage Group PLC (LSE:SGE) takes third place with a 1.7% rise. 

Countering those gainers, SSE PLC (LSE:SSE) has shed 1.1% in early dealings, while BP PLC (LSE:BP.) is down 0.6% despite oil's gains. 

Chemring Group (LSE:CHG) is down 4% after the defence and security technology company told shareholders its full-year outlook remains unchanged, despite a slower-than-expected start to the financial year caused by operational disruption at one of its US manufacturing sites.

7.45am: Retail sales perk up 

Shoppers started the year in a confident mood, giving retailers a welcome lift.

The Office for National Statistics (ONS) said retail sales volumes jumped 1.8% in January 2026, the biggest monthly rise since May 2024. That follows a solid 0.4% increase in December, rounding off a positive start to the year.

Over the three months to January, sales nudged up 0.1% compared with the previous quarter. Volumes were 4.5% higher than a year ago and now sit level with their pre-pandemic position in February 2020.

The January bounce was driven by a pick-up in automotive fuel and firmer demand for non-food items. Commercial art galleries, computer and telecoms retailers and household goods stores all enjoyed stronger trade. That helped offset softer performances at supermarkets and department stores.

Online shopping also remained upbeat. Spending values rose 1.3% month-on-month and were up 14.7% year-on-year. Overall spending increased 1.6%. The share of sales made online dipped only slightly, from 28.3% to 28.2%, suggesting digital demand remains resilient even as shoppers return to the high street.

7.15am: FTSE set for brighter start

London’s blue-chip index is expected to claw back the majority of Thursday’s losses this morning. After retreating from recent record highs to close 59 points down at 10,627, futures suggest the FTSE 100 will open about 36 points higher.

Geopolitical tensions are back in focus amid reports that the US could be preparing for a strike on Iran. Brent crude is up 0.7% at $72.13 a barrel, a six-month high, while gold has added 0.6% to $5,026 an ounce as investors seek safety.

Wall Street weakened overnight, with the Dow Jones down 0.5% and the S&P 500 and Nasdaq both off 0.3%.

Asian markets are mostly softer this morning. Tokyo has fallen 1%, Hong Kong’s Hang Seng is down 0.6%, and Shanghai’s SSE Composite has dropped 1.3%.

South Korea’s Kospi is the outlier, rising 2.2% on strong demand for defence and shipbuilding stocks, hitting a fresh high.

In Australia, the ASX 200 closed only marginally lower.