The FTSE 100 ended a losing week on the back foot as investors weighed UK local election results and fresh clashes between the US and Iran in the Middle East.

AJ Bell investment director Russ Mould said: “While officially the ceasefire between the US and Iran remains in place, an exchange of fire in the Strait of Hormuz has helped to extinguish some of the hope that a deal between the parties might be close.”

The FTSE 100 closed down 43.88 points, 0.4%, at 10,233.07. The FTSE 250 ended down 33.34 points, 0.2%, at 22,849.38, and the AIM All-Share fell 3.89 points, 0.5%, at 814.43.

For the week, the FTSE 100 fell 1.4%, the FTSE 250 rose 1.7% and the AIM All-Share advanced 2.0%.

Iranian media reported fresh “sporadic clashes” with US naval forces in the Strait of Hormuz on Friday, following a flare-up the night before, despite the ceasefire in the Gulf.

“For the last hour, sporadic clashes have taken place between the Iranian armed forces and American vessels in the Strait of Hormuz,” the Fars news agency said.

For its part, the US said its forces fired on and disabled two Iranian-flagged tankers that attempted to violate the blockade of Iran’s ports.

Nonetheless, secretary of state Marco Rubio said Washington was expecting a response from Iran on Friday to US proposals for a deal to end the conflict.

“We’re expecting a response from them today at some point… I hope it’s a serious offer, I really do,” Mr Rubio told reporters during a visit to Rome.

Brent crude for July delivery was trading at 101.49 dollars a barrel on Friday, up compared to 97.76 at the time of the equities close in London on Thursday.

The more downbeat mood in equities was reflected in Europe on Friday, where the Cac 40 in Paris ended down 1.1%, and the Dax 40 in Frankfurt ebbed 1.3%.

But US markets advanced once more after mixed economic data, with recent strong earnings continuing to underpin advances.

The Dow Jones Industrial Average was up 0.1%, the S&P 500 rose 0.7% while the Nasdaq Composite was up 1.3%.

The yield on the US 10-year Treasury widened to 4.37% on Friday from 4.36% on Thursday. The yield on the US 30-year Treasury narrowed to 4.94% on Friday from 4.95%.

US data was mixed on Friday with strong looking non-farm payrolls figures and a weak consumer confidence report.

The US economy added more jobs than expected in April, while the unemployment rate remained unchanged, according to the US Bureau of Labour Statistics.

Non-farm payrolls rose 115,000 in April, slowing from 185,000 in March, but beating 62,000 FXStreet consensus.

March’s total was revised upwards by 7,000 from 178,000, while February’s total was revised down by 23,000, meaning 156,000 jobs were shed.

The unemployment rate stayed stable at 4.3% in April, in line with consensus.

Morgan Stanley said the report will “build more confidence” in labour market stability while the Federal Open Market Committee “remains uncertain about whether higher oil prices will spill into slower growth or faster core inflation. Labuor market stability gives the Fed time to wait.”

But ING said while a second consecutive firm jobs report is a “big win” for the US economy, other labour market data is “not as firm” and consumers “certainly aren’t recognising the strength of this data point.”

Reflecting this, US consumer sentiment came in at its lowest-ever recorded level in May, according to a University of Michigan survey, with Americans battered by high prices and concerns about the Iran war.

The university’s Index of Consumer Sentiment came in at 48.2 in May, its lowest level since data collection began in 1952, and below 49.5 market consensus.

The pound firmed to 1.3623 dollars on Friday afternoon from 1.3616 on Thursday. Against the euro, sterling was little changed at 1.1568 euros from 1.1567 on Thursday.

Sterling and UK gilts held steady as markets digested the implications of heavy losses suffered by the Labour government in UK local elections.

Prime Minister Sir Keir Starmer pledged to fight on but the defeat could yet speak a leadership challenge.

On the FTSE 100, BT led the way, rising 6.6% as Goldman Sachs and JP Morgan sang its praises.

JP Morgan reiterated an “overweight” rating and raised its share price target to 310 pence from 300p.

In a research note, titled: “Entering the next leg of the re-rating journey,” JPM highlighted an improving equity free cash flow position that could support a doubling in BT’s dividend by 2030.

Goldman Sachs retained its “buy” rating and “materially” raised its mid-term dividend per share estimates.

Earlier this week, Bank of America upgraded BT, citing its hopes for an upturn in the dividend.

British Airways owner IAG closed down 2.8%, although above earlier lows, as it warned of a profit hit from rising fuel costs.

Chief executive Luis Gallego said higher fuel prices will “inevitably lead to lower profit this year than we originally anticipated.”

IAG now expects full-year fuel costs of £9 billion, including hedging positions, which would be 27% higher than £7.08 billion in 2025, and above the £7.0-7.4 billion range IAG forecast in February.

Intertek was down 2.7% as it rejected a third bid from EQT, believing it “significantly undervalues” its prospects.

Gold traded lower at 4,711.50 dollars an ounce on Friday, from 4,742.97 on Thursday.

The biggest risers on the FTSE 100 were BT Group, up 14.60p at 236.20p, Whitbread, up 88.00p at 2,410.00p, JD Sports Fashion, up 2.08p at 75.08p, Vodafone, up 2.65p at 118.65p and Entain, up 10.40p at 548.00p.

The biggest fallers on the FTSE 100 were Lion Finance, down 550.00p at 11,030.00p, Babcock International, down 47.50p at 1,052.50p, Metlen Energy & Metals, down 1.50p at 36.30p, Rolls Royce, down 39.20p at 1,219.80p and BAE Systems, down 58.00p at 1,933.80p.

Monday’s global economic calendar sees China CPI and PPI data and US home sales figures.

Monday’s local corporate calendar has half-year results from contract caterer Compass.