London stocks rise as US-Iran truce boosts risk appetite

FTSE Futures Updates

London’s FTSE 100 experienced an uptick on Monday, driven by a cessation in U.S.-Iran hostilities over the weekend, which led to a decrease in oil prices and enhanced global risk sentiment. However, a downturn in energy stocks limited the overall gains.

The blue-chip FTSE 100 index rose 0.4% to 10,781 points by 0922, while the midcap FTSE 250 climbed 0.6%.

  • The U.S. has temporarily halted its military operations against Iran over the weekend, and a high-ranking Iranian official informed that Tehran would reciprocate, contingent upon the continuation of the U.S. bombing pause.
  • Oil prices tumbled more than 6% to about $90 a barrel, weighing down British energy stocks by 2.5%, set for their biggest one-day drop since the beginning of the month.
  • Travel and leisure stocks were among the biggest gainers with a 2.3% advance, with IAG up 2.8% and Premier Inn owner Whitbread adding 2%.
  • Meanwhile, quarterly earnings also exhibited an upward trajectory. The FTSE 350 telecom services provider index gained 3%, bolstered by a 4.5% increase in Vodafone after the company raised its forecast to account for its Safaricom deal, indicating expectations to achieve results at the upper end of its new range.
  • Pharma stocks opened with an increase of 1.3%, as AstraZeneca experienced a rise of 1.6% following its affirmation of annual and long-term forecasts, alongside surpassing second-quarter profit expectations.
  • Results from U.S. Big Tech companies, including Microsoft and Apple, will also be crucial to gauge whether the AI-driven rally is sustainable, which could set the tone for broader markets.
  • Policy statements from the U.S. Federal Reserve and the Bank of England will be scrutinised later this week for indications regarding the banks’ forthcoming actions.
  • Markets are anticipating a minimum of one 25-basis-point rate increase in both economies, with a probability exceeding 60% for a second increase in the U.S. and over 40% in the UK, as per data compiled by LSEG.
  • Vesuvius shares slid about 10% to the bottom of the FTSE 250 after a dip in its profit for the first half of the year.