The UK’s FTSE 100 experienced a notable increase, reaching one-month highs on Wednesday, following an agreement between the United States and Iran regarding a two-week ceasefire. This development led to a surge in global stocks and a significant decline in oil prices. U.S. President Donald Trump announced the agreement late on Tuesday, merely two hours prior to a deadline he had established for Iran to open the blockaded Strait of Hormuz or confront the obliteration of its “whole civilisation”.

The last-minute turnaround bolstered sentiment as traders looked forward to a resurgence of shipping through the strait, which is responsible for approximately one-fifth of global oil and liquefied natural gas shipments. The blue-chip FTSE 100 index rose 2.9% by 1042, reaching its highest level since March 3, while the midcap FTSE 250 soared 4.5% to its highest since March 10. Heavyweight oil companies, including BP and Shell, dropped more than 5% each, tracking a near 15% plunge in crude prices. Shell has revised its first-quarter gas production outlook downward, while indicating a significant increase in oil trading profits and a potential impact on short-term liquidity, providing an initial insight into the volatile repercussions of the Middle East conflict on the earnings of major oil companies.

All other major subsectors within the FTSE 350 experienced gains, with rate-sensitive homebuilders, banks, and travel companies leading the charge. Investors have factored in approximately 35 basis points of interest rate hikes by the Bank of England this year, translating to one and two quarter-point increases, in contrast to the 63 basis points observed on Tuesday. British house prices experienced an unexpected decline last month, as economic uncertainty arising from the Iran war negatively impacted buyer demand, according to mortgage lender Halifax.

British Prime Minister Keir Starmer is set to visit the Gulf on Wednesday for discussions with regional leaders aimed at securing a permanent opening of the Strait of Hormuz following a ceasefire between the U.S. and Iran, according to his office. Gamma Communications opened new tab jumped almost 14% after the British telecom firm said it is in preliminary discussions with a number of parties for a potential sale.