London Stocks Rebound on Oil Price Retreat, Eyeing Crucial US Inflation Data

London's FTSE 100 index rose 0.45% to 10,656.78 points on Friday after oil prices retreated more than 2%. The decline in oil prices came as reports emerged of a push for a Strait of Hormuz deal between Gulf foreign ministers and Iranian counterparts.

The blue-chip index was up from its five-session losing streak but still poised for its biggest weekly loss since early July. Meanwhile, the midcap FTSE 250 gained 0.36% but was on track for its sharpest weekly decline in over four months.

Oil majors Shell and BP saw slight declines of 0.3% and 1%, respectively, while energy stocks were set to outperform peers for the week. Banking and aerospace sectors contributed significantly to the FTSE 100 gain, with heavyweight banks HSBC and Barclays rising 1.2% and 1.4%, respectively.

Investors are closely watching US consumer inflation data due later in the day, which could influence interest rate hike decisions. The UK economy grew at its fastest annual pace in 18 months in July, partly driven by a possible AI boost, further improving market sentiment.