The FTSE 100 was relatively stable, with gains in retailers offset by losses in oil majors amid easing oil prices on Wednesday.
Oil prices were lower as optimism grew that the US and Iran would strike a deal, allowing oil to flow from the Middle East once more.
Brent was down 3% to $96.70 at the time of writing as the FTSE 100 rose 0.2%.
“Brent crude oil prices remain below $100 per barrel – a good barometer of how talks between Tehran and Washington are perceived to be progressing. Plus, government bond yields are in check at levels below their recent highs,” said AJ Bell investment director Russ Mould.
“The hope will be that this is finally the week when a real breakthrough is achieved, but should negotiations fail then we could see market patience wear thin.”
Falling oil prices weighed on the FTSE 100 index, with major oil companies BP and Shell retreating.
BP shares were also hit by yet another abrupt departure from the leadership, with the chair leaving under a cloud.
“BP shares have continued their descent, as the lower oil prices collide with the shock ousting of the chair, Albert Manifold. He was removed for conduct issues, deemed to be unacceptable,” said Susannah Streeter, chief investment strategist, Wealth Club.
“It’s like a revolving door at the energy giant – with Manifold only in the position for less than a year, and an interim chair, independent director Ian Tyler, now taking his seat.”
Although oil majors dragged the index marginally lower on Wednesday, lower energy prices helped support consumer-facing sectors that desperately need to avoid a series of interest rate hikes.
And despite inflation looking set to persist through the rest of the year, even if the Strait of Hormuz was opened today, investors were happy to buy into names such as JD Sports and Marks & Spencer on Wednesday.
JD Sports was the top riser, with a 4.5% gain. Burberry enjoyed gains on hopes a US/Iran deal will see a return of the Middle East shoppers the luxury sector has missed dearly.
IAG joined a rally in airline stocks, rising 3% on the session. Diminishing fears of a jet fuel shortage are pushing the sector higher after it sustained declines in the early stages of the conflict.