The FTSE 100 was firmly higher on Tuesday as a sense of optimism crept into stock markets, with oil prices lower and US tech stocks surging higher.
London’s leading index was trading 0.6% higher at the time of writing.
“The FTSE 100 held firm as investors absorbed the latest news from the Middle East,” said Dan Coatsworth, head of markets at AJ Bell.
“Brent crude oil prices were steady at $82 per barrel, with a full retreat closer to pre-war levels unlikely to come until a concrete deal is in place and there is clear evidence shipping is flowing through the Strait of Hormuz. The reaction in government bond yields to the breakthrough between Washington and Tehran has been more muted than for equities.”
European stocks jumped on the tailcoats of US stocks on Tuesday after the NASDAQ closed 3% and the Dow Jones hit an all-time record high.
“Across the pond, Wall Street was in a much brighter mood, with new highs for some indices as investors cheered the combination of lower oil prices, less pressure on inflation and a reduced risk of further rate hikes following President Trump’s US-Iran deal,” explained Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“Tech was the clear winner, as growth stocks benefited from a backdrop that suddenly looks a little less hostile, though the rally’s durability still depends on the deal holding together.”
In London, it was more of a benign session with little in the way of major FTSE 100 corporate updates to move the dial on a stock-specific basis.
Rolls-Royce, rising 2.8%, was back among the best performers as investors cheered the alleviation of aviation risks. BAE Systems rose 2.5% on similar sentiment.
Rentokil was the top faller, losing 1.8%.