European stocks rallied on Friday, as oil prices fell, despite weak telecommunications stocks as worries of competition from satellite-based mobile services sparked sharp falls.

In London, the FTSE 100 index ended up 110.45 points, or 1.1%, at 10,552.05. The FTSE 250 climbed 269.90 points, 1.1%, to 24,213.78, and the AIM all-share added 6.86 points, 0.9%, at 777.53.

For the week, the FTSE 100 was up 0.9%, the FTSE 250 was up 0.1%, and the AIM all-share was down 0.8%.

“Markets continue to move like a yo-yo as investors with a short-term view flip-flop between inflation and interest rate concerns to corporate earnings strength,” said Russ Mould, investment director at AJ Bell.

“The trading week is set to finish on a positive note,” Mr Mould noted. But he added that while this is a “welcome development”, the “past few weeks and months have taught us that sentiment can switch on the smallest thing”.

Supporting the mood, a modest drop in the oil price followed US President Donald Trump ruling out a strike on Iran before next month’s US midterm elections.

Mr Trump said Washington was holding “productive discussions” with Tehran after reports that the White House had asked the Pentagon to draw up plans for a possible attack ahead of the November 3 vote.

Brent oil was quoted at 104.86 dollars a barrel on Friday, down from 105.57 dollars late on Thursday.

In European equity markets on Friday, the CAC 40 in Paris ended up 1.0%, while the DAX 40 in Frankfurt rose 1.1%.

European car makers rose after the European Union struck an interim deal to restrict imports from China.

Maros Sefcovic, the EU’s commerce chief, said: “We have reached a shared understanding to moderate China’s export of hybrids and plug-in hybrids to the EU. This opens the prospect of cutting China’s exports by more than a half.”

Mr Sefcovic told a news conference that Beijing had also agreed to lower tariffs for some EU products, which could save the bloc at least 225 million euros.

“Today’s announcement can help facilitate the transition to a new era of Chinese presence in the European market in an orderly way and this is in the long-term interests of all parties,” Sigrid de Vries, director-general of the European Automobile Manufacturers’ Association, said in a statement.

In response, BMW rose 2.1%, Mercedes-Benz climbed 1.3%, and Volkswagen firmed 2.1%.

In New York, markets were higher. The Dow Jones Industrial Average was up 0.5% at the time of the closing bell in London, as was the S&P 500 and the Nasdaq Composite.

The yield on the US 10-year Treasury was quoted at 5.28% on Friday, narrowed from 5.34% at the same time on Thursday. The yield on the US 30-year Treasury was quoted at 5.62%, trimmed from 5.66%.

The pound was quoted at 1.3233 dollars, up from 1.3214 dollars. Against the euro, sterling firmed to 1.1818 euros from 1.1799 euros.

The euro eased to 1.1195 dollars from 1.1198 dollars. Against the yen, the dollar was trading at 158.36 yen, up from 158.26 yen.

On the FTSE 100, publishing and software stocks, which have been weak features thanks to fears of AI disruption, were in the ascendance.

Analytics and data provider Relx rose 4.8%, accountancy software seller Sage climbed 4.3%, and credit checking agency Experian advanced 4.2%.

Meanwhile, miners rose, reflecting higher metals prices. Antofagasta, Fresnillo and Glencore were all prominent gainers, up 4.6%, 2.5% and 2.8%.

Glencore hosted a sell-side briefing in Sydney ahead of next week’s listing on the Australian Stock Exchange.

According to analysts at JP Morgan, Glencore’s management believes its equity undervalues its copper portfolio, specifically its South American growth projects.

Gold was quoted at 4,189.88 dollars an ounce, up from 4,116.87 dollars.

Telecommunications stocks were the worst performers on the FTSE 100, with Airtel Africa falling 6.3%, Vodafone Group losing 4.9% and BT Group declining 2.4%.

The downward move came after SpaceX’s acquisition of low-band spectrum heightened concerns over growing competition from satellite-based mobile services.

SpaceX chief Elon Musk called the deal “the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America”.

On Wall Street, SpaceX was up 1.9%. T-Mobile US, Verizon and AT&T fell 10%, 6.5% and 7.1% respectively. In Europe, Telefonica fell 4.6%, Orange fell 2.5% and Deutsche Telekom fell 8.4%.

Airtel Africa’s decline came as its mobile money business, Airtel Mobile Commerce, began conditional dealings on the London Stock Exchange, marking the largest London flotation since 2021.

The company, which operates as Airtel Money, priced its initial public offering at 196 pence per share, giving it a market capitalisation of £5.3 billion. However, it closed 6.0% lower at 184.26p.

On the FTSE 250, Morgan Advanced Materials soared 9.4% as RBC Capital Markets upgraded the manufacturer of specialist thermal, ceramic and carbon products to ‘outperform’ and set a price target of 330p.

RBC thinks the potential sale of its thermal business can catalyse an incremental re-rating.

Ocado Group continued its strong recent run, up 6.7%, after a report this week suggested that Australia’s Coles Group is exploring the use of robots in its supermarkets to pick and pack grocery orders and is in early-stage talks with the London-listed company about trialling the technology in one of its Melbourne stores.

Trainline shares rose 3.8% after the UK’s rail watchdog set out draft measures for ticket selling, proposing that Great British Railways (GBR) must not “abuse its position” in the retail market.

The UK Office of Rail & Road said GBR must not give “its own online ticket retail business an undue advantage”.

Analysts at Panmure Liberum said there are lots of positives from the code of practice, which requires GBR to act in a way that promotes competition, and fair, transparent and non-discriminatory terms across a host of issues for retailers.

“The negative is that there is no mention of processes around changing commission rates in the draft code, which is arguably the most important element that GBR will control,” the broker added.

Heading lower was Rightmove, which fell 2.4%, giving back some of Thursday’s strong gains which followed reports of renewed bid interest in the online property portal.

SSP also fell, down 4.1%, as it forecast full-year earnings below expectations, reflecting subdued North American passenger volumes.

The London-based travel food and beverage operator, which owns Upper Crust and Millie’s Cookies, expects underlying operating profit below plan at £230.0 million. Citigroup said this was 3.8% below company-compiled consensus.

The biggest risers on the FTSE 100 were Relx, up 125.0p at 2,720.0p, Antofagasta, up 165.0p at 3,770.0p, Sage Group, up 44.0p at 1,071.5p, ICG, up 73.0p at 1,808.0p and Experian, up 108.0p at 2,682.0p.

The biggest fallers on the FTSE 100 were Airtel Africa, down 19.4p at 290.2p, Vodafone Group, down 6.05p at 118.35p, BT Group, down 4.70p at 192.75p, Kingfisher, down 4.4p at 318.0p and International Consolidated Airlines Group, down 4.1p at 415.9p.

Monday’s local corporate calendar has a trading statement from recruiter Hays.

Next week’s global economic calendar has a US inflation print and UK economic growth data.

On Monday, a US monthly budget statement is expected, though US bond markets will be closed for Columbus Day. The New York Stock Exchange will remain open. Japanese markets will be closed on Monday for Health & Sports Day.

Speeches are expected from Bank of England deputy governor Sarah Breeden as well as Catherine Mann, a member of the BoE’s Monetary Policy Committee.

Contributed by Alliance News.