The FTSE 100 was higher on Thursday after the US said it had completed the latest strikes against Iran.
Investors will now be in a state of ‘wait and see’ whether this draws a line under a spate of attacks in the Middle East and sees the US and Iran return to the negotiating table.
The Strait of Hormuz remains closed, and the risk of an oil shock to the economy grows greater by the day.
But equities have displayed a remarkable degree of resilience, which was again on show on Thursday with the FTSE 100 rising 0.5% on hopes a lasting ceasefire could soon be struck.
“Volatility is reigning as the twists and turns of the Iran war collide with fervour and apprehension about tech valuations and the looming SpaceX listing launch,” said Susannah Streeter, Chief Investment Strategist, Wealth Club.
“The FTSE 100 has clawed back ground after yesterday’s losses, the oil prices have experienced another waltzer ride. They had spun upwards after President Trump promised to hit Iran hard and now have dropped back after the US military said it had completed the latest round of action.
“Hopes are rising that talks can resume, but these repeated strikes and skirmishes hardly provide the bedrock of trust which negotiations need before significant progress can be made.”
In a sign of mild wider relief, Brent oil prices fell 0.5% to $92.57.
In London, Asian leaning stocks were among the best performers with Prudential jumping 4% and heavyweight bank HSBC rising 2.5% and adding a large number of points to the index.
“As has often been the case during the Iran conflict, the UK’s flagship index has found support from its collection of energy companies and more traditionally defensive names. Miners and other China-linked stocks were lifted by data suggesting the country is investing heavily in AI and consuming raw materials at a healthy rate,” explained AJ Bell investment director Russ Mould.
Halma was the FTSE 100’s top faller, losing 12%, despite the group posting strong full-year results.