UK stocks edge higher as U.S.-Iran peace deal lifts risk sentiment
London equities trade modestly higher on Monday as easing geopolitical tensions support broader risk appetite and push oil prices sharply lower. The move helps travel and leisure shares while weighing on heavyweight energy stocks, leaving the FTSE 100 only slightly firmer than the broader mid-cap index.
Highlights
- Brent crude drops nearly 5% after U.S.-Iran preliminary peace deal and Strait of Hormuz reopening, boosting risk sentiment and lifting FTSE 100 by 0.10%.
- Precious metal miners jump 6.9% as gold and silver rise, with Fresnillo up 10.1% and Hochschild up 7.8%; homebuilders gain 2.2%.
- Bunzl rises 1.4% on news of Elliott's nearly 5% stake, while IQE surges 20.9% after Tower Semiconductor optical deal and Frasers Group falls 2% on Accent buyout offer.
Market moves after oil price drop
As reported by Reuters, Brent crude falls nearly 5% after officials from Washington and Tehran say they have reached a preliminary agreement to end the three-month conflict, including the reopening of the Strait of Hormuz, a critical global oil shipping route.The FTSE 100 rises 0.10% to 10,481.76 points by 10:48 a.m. GMT, while the FTSE 250 gains 0.57%. Lower oil prices lift travel and leisure stocks by 1.6%, with Wizz Air up 5.6%. At the same time, oil majors BP and Shell fall 3.4% and 4.3%, respectively, tracking the decline in crude prices.
Precious metal miners lead sectoral gains with a 6.9% jump as gold and silver prices extend gains. Fresnillo climbs 10.1% and Hochschild advances 7.8%. Homebuilders also move higher, rising 2.2%, with Persimmon up 3% and Bellway adding 2.6%.
Corporate movers and rate outlook
The Bank of England is expected to hold interest rates on Thursday, after the European Central Bank raised rates by 25 basis points last week. That policy backdrop leaves investors balancing geopolitical relief with expectations for borrowing costs in the UK and across Europe.Bunzl adds 1.4% after a report says activist investor Elliott has taken an almost 5% stake in the supplies distributor. Among mid-caps, Frasers Group drops 2% after the sporting goods retailer launches a buyout offer for Australia's Accent Group, while chipmaker IQE surges 20.9% after signing a deal with Tower Semiconductor for an optical connectivity solution.
In our earlier article on the preliminary U.S.–Iran agreement to reopen shipping through the Strait of Hormuz, we noted that the announcement triggered an immediate drop in Brent prices despite many details still being unresolved. The piece highlighted how the deal could ease energy-supply fears after the three-month conflict and set up a 60-day negotiation window, while markets weighed the risk that differing interpretations and nuclear-related talks could still derail progress.
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