𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

European stocks advanced on Tuesday, and the oil price slid, amid cautious optimism for de-escalation in the Middle East.

David Morrison, senior market analyst at Trade Nation, said: “Despite the breakdown of peace negotiations between the US and Iran over the weekend, and the US blockade of Iranian ports which began yesterday, there’s a general feeling that an end to the war is likely to come sooner rather than later,.

The FTSE 100 closed up 26.10 points, 0.3%, at 10,609.06. The FTSE 250 ended up 447.40 points, 2.0%, at 22,724.29, and the AIM All-Share rose 8.26 points, 1.1%, to 790.57.

In European equities on Tuesday, the CAC 40 in Paris closed up 1.1%, and the DAX 40 in Frankfurt rose 1.3%.

The improved market equity mood came amid hopes of fresh talks between the US and Iran to resolve the seven-week conflict.

The US said “the ball is in the Iranian court” as diplomats accelerated efforts for a new round of peace talks after weekend negotiations failed to produce a deal.

US President Donald Trump said Iranian representatives had called Washington since a US delegation returned empty-handed from negotiations in Islamabad.

“They’d like to make a deal. Very badly, very badly,” Mr Trump told reporters.

At the same time, the US has implemented a naval blockade of Iranian ports at the Strait of Hormuz, through which one-fifth of world oil passes.

Mr Morrison said nobody “wants to be under-exposed to risk assets should the war end suddenly as such news would trigger a strong rally”.

Brent oil traded lower at 96.28 dollars a barrel on Tuesday afternoon, down from 101.95 dollars at the time of the equities close in London on Monday.

While providing a boost generally for equities, the oil price slide held back London’s FTSE 100 where index heavyweights BP and Shell retreated 2.8% and 2.4% respectively.

Joshua Mahony at Scope Markets said rumours of a second summit between the US and Iran have started to gather momentum.

He said: “The focus on halting Iranian nuclear enrichment centres around timelines, with Iran offering up a five-year period as the US demands 20 years.

“Nonetheless, this provides the basis for a negotiated settlement, raising the possibility of a reopening of the Straits [of Hormuz] in the not too distant future.

“In the meanwhile, rare Israel-Lebanon talks in Washington highlights a willingness to create a situation where the country can regain control from Hezbollah and lower the tensions in the region.”

In New York, markets were higher. The Dow Jones Industrial Average was up 0.7%, the S&P 500 was 0.9% higher, and the Nasdaq Composite advanced 1.4%.

The yield on the US 10-year Treasury was at 4.28% on Tuesday, narrowed from 4.33% on Monday. The yield on the US 30-year Treasury fell to 4.88% from 4.93%.

The pound rose to 1.3571 dollars on Tuesday afternoon from 1.3451 dollars on Monday. Against the euro, sterling rose to 1.1503 euros from 1.1492 euros.

The euro stood higher against the greenback at 1.1799 euros from 1.1705 euros. Against the yen, the dollar was trading lower at 158.79 yen compared to 159.73 yen.

Reflecting concerns from the fall-out of the Middle East crisis, the International Monetary Fund cut its 2026 global growth projection warning that the world economy could be “thrown off course” by the war.

The global economy is to grow by 3.1% this year, said the IMF in its World Economic Outlook report, released during its spring meetings in Washington, down from 3.3% forecast in January.

For the UK, the IMF forecast growth of 0.8% in 2026, improving to 1.3% in 2027. As recently as January, the IMF had predicted 1.3% growth in 2026 and 1.5% in 2027.

Back in London, falls in tobacco companies Imperial Tobacco and British American Tobacco, down 4.8% and 2.9% respectively, also held back the FTSE 100.

Imperial Tobacco slumped after an underwhelming trading update left investors disappointed as it left guidance unchanged.

“Analysts seem disappointed with the first-half trading update, thanks to concerns over market share loss and currency movements, even if Imperial Brands is sticking to its profit guidance for the full year to September,” noted AJ Bell investment director Russ Mould.

Intertek led the risers, soaring 13%, after it said it had launched a strategic review and was considering selling its Energy & Infrastructure business.

The London-based assurance, inspection, product testing and certification company is weighing up either a sale or demerger of Intertek Energy & Infrastructure from Intertek.

Analysts at RBC Capital Markets said a “for sale sign has essentially been hoisted up over the business”.

“With merger talks with BVI having been abandoned in mid-2024, this could yet mark a value creative exit for Intertek’s shareholders and a sale has always been the key risk to being excessively bearish,” RBC added.

On the FTSE 250, Oxford Instruments said it expects to deliver a “resilient” full-year performance in line with market expectations boosted by an uptick in orders.

Shares in the Buckinghamshire-based high-technology instruments company rose 5.4% as it said it expects order intake for the financial year to March to rise about 8% on an organic constant currency basis, with a book-to-bill ratio of about 1.07.

Gold traded at 4,806.75 dollars an ounce on Tuesday, up from 4,714.40 dollars at the same time on Monday.

The biggest risers on the FTSE 100 were Intertek, up 490.0p at 4,308.0p, Metlen Energy & Metals, up 1.6p at 34.9p, Fresnillo, up 167.0p at 3,691.0p, Convatec, up 8.0p at 238.0p and Rentokil Initial, up 17.0p at 506.8p.

The biggest fallers on the FTSE 100 were Imperial Brands, down 149.0p at 2,933.0p, Tesco, down 14.4p at 470.0p, British American Tobacco, down 124.0p at 4,224.0p, Shell, down 95.5p at 3,375.5p, and BP, down 14.1p at 565.1p.

Wednesday’s global economic calendar has eurozone industrial production data and the Federal Reserve’s Beige Book.

Wednesday has trading statements from housebuilder Barratt Redrow, miner Antofagasta and recruiter Robert Walters.

Contributed by Alliance News.