- FTSE 100 closes at 10,431
- Peace deal bolsters sentiment
- Brent crude drops 5%
- Asia shares buoyant
4:55pm: FTSE closes lower
The FTSE 100 finished lower on the day, slipping 0.4% to 10,431, but the headline decline masked a far more nuanced session beneath the surface.
Markets were essentially digesting a sharp repricing of geopolitical risk after the reopening of the Strait of Hormuz, which knocked the oil risk premium and sent Brent crude down around 5.5% to $82.52. That move helped ease inflation concerns and provided a clear tailwind for cyclicals, miners and other rate-sensitive areas, but it also hit the index’s heavyweight energy names hard enough to keep the FTSE in the red.
3.15pm: Deeper into the red
The FTSE 100 reversed an early rally to trade almost 40 points lower on Monday afternoon, as sharp falls in Shell and BP offset gains elsewhere and left London's blue-chip index nursing a modest loss despite Wall Street roaring higher on the back of the US-Iran peace deal announced over the weekend.
The index had opened sharply higher, buoyed by President Trump's declaration that an agreement to end the conflict was "now complete," but the arithmetic of its composition worked against it: Shell and BP, which together account for a significant slice of FTSE 100 weighting, fell around 4% each as Brent crude tumbled nearly 5% to below $83 a barrel on the prospect of Iranian oil returning to global markets and the Strait of Hormuz reopening to unrestricted shipping.
The energy majors had been among the index's best performers during the three-month conflict, their share prices elevated by an oil price that had surged more than 40% since fighting began in late February, making the reversal an unwinding of that premium rather than a fundamental deterioration.
Elsewhere, the picture was broadly positive, with miners, airlines and travel stocks all advancing strongly as the peace dividend flowed through to the sectors that had suffered most from the conflict.
In the United States, the mood was considerably brighter, with the Dow Jones Industrial Average surging more than 600 points to an intraday record high and the Nasdaq Composite jumping over 2%, investors unburdened by the same energy-sector drag that weighed on London.
2.15pm: Turning negative
Ahead of the Wall Street open, the FTSE 100 had given up the morning's early gains and had turned ever so slightly negative, dipping just 1 point for the session, to 10,470.
Earlier, US stock futures surged in anticipation of the reopening of the Strait of Hormuz, sending oil prices sharply lower and lifting risk appetite at the start of a holiday-shortened week. Nasdaq 100 futures led the advance with a gain of 2%, while S&P 500 futures rose 1.3% and Dow Jones futures climbed 1%, building on solid gains from Friday.
President Trump described the ceasefire as "complete" in a Truth Social post late Sunday, with formal signing expected in Switzerland on Friday and peace talks to begin within 60 days.
12.30pm: Back to flat
The FTSE 100 has given back the bulk of a near 100-point opening gain to stand just 11 points higher in early afternoon trading, as initial euphoria over the US-Iran ceasefire agreement faded and investors took stock of the deal's limited detail.
London's blue-chip index had surged at the open after Washington and Tehran announced a provisional ceasefire that should reopen the Strait of Hormuz, but the rally quickly ran out of steam as tanker operators and market participants grew wary of the agreement's lack of specifics.
US stock futures remain firmly in the green, with Nasdaq 100 contracts up 2.1% and S&P 500 futures rising 1.3%, suggesting Wall Street is more willing to take the deal at face value.
Brent crude fell roughly 5% to just above $83 a barrel as fears over supply disruptions eased, a move that weighed on the energy stocks which dominate the FTSE 100.
President Trump described the ceasefire as "complete" in a Truth Social post late Sunday, with formal signing expected in Switzerland on Friday and peace talks due to begin within 60 days.
SpaceX added to the positive mood in the US after shares extended Friday's near-20% debut surge, pushing the Elon Musk-led company's market value above $2 trillion.
The Federal Reserve's rate decision on Wednesday is the week's main event, with traders pricing in a near-certain hold on interest rates.
11:17am: UK oilers bear brunt of crude drop
UK oil majors fell sharply in early trading as crude prices tumbled on hopes that a US-Iran agreement will reopen the Strait of Hormuz and ease pressure on global energy supplies.
BP dropped 3%, while Shell slid 4.4%. The moves tracked a broader sell-off in crude, with WTI down 5.68% at $80.06 a barrel and Brent off 5% at just a smidge under $83.
The fall followed reports that Washington and Tehran had reached a framework deal that could restore commercial shipping through Hormuz, one of the world’s most important oil transit routes.
Donald Trump said the agreement was “complete” and posted “Let the oil flow”, though the reopening is still expected to depend on a formal signing and the clearance of mines from the waterway.
The drop marks a sharp reversal from last week’s elevated prices, when Brent was still trading near $90 a barrel. Traders are now pricing in a material easing of supply risk, but the market is likely to remain sensitive to whether ships can move safely through the strait and whether Gulf oil flows return to normal.
10.11am: JP Morgan re-shuffles builders
The FTSE 100, after a strong start, is progressively losing its fizz to stand just 22 points higher in morning trading.
Elsewhere, Persimmon shares rose 4% on Monday after JP Morgan named the housebuilder as its preferred stock in the sector while downgrading Taylor Wimpey and Vistry to underweight, as rising mortgage rates and build cost inflation force the bank to cut its 2027 earnings forecasts by an average of 20%.
Vistry dropped 3% in early trading following the note from analyst Zaim Beekawa.
The bank favours Persimmon on the grounds that its lower average selling price, geographic spread and vertical integration offer better insulation against cost pressures than peers.
9.03am: Airlines and miners on the march
After a sprightly start, which saw the UK stocks benchmark rise 91 points, the throttle was eased back a little as gains were limited to 50 points heading into the second hour of trading in London.
Donald Trump's announcement of a peace deal to end the US-Iran war late on Sunday sent a diverse collection of stocks surging on Monday, as markets priced in lower oil, reopened shipping lanes and the prospect of a return to something approaching normality for global trade and travel.
The most obvious winners were the airlines and their suppliers, with Wizz Air, the budget carrier with heavy exposure to Central and Eastern European routes, including Middle East-facing corridors, surging 9.07%, while British Airways owner International Consolidated Airlines Group rose 4.56%.
Rolls-Royce, which supplies jet engines to a wide range of commercial carriers and had been punished as air travel sentiment soured during the conflict, climbed 4.97%, its shares benefiting from the simple logic that more flights mean more engine hours and more maintenance revenue.
Airport food and beverage operator SSP Group, which runs branded food outlets in airports and rail stations across the world, advanced 5.30%, with investor confidence in passenger throughput recovering sharply as Middle East route restrictions looked set to ease.
The mining sector provided the most counterintuitive element of the peace dividend story.
Gold and silver producers Hochschild Mining and Pan African Resources rose 6.34% and 5.32% respectively, even though conventional wisdom might suggest a resolution to a geopolitical crisis would suppress safe-haven demand and therefore depress precious metals prices.
The logic runs differently in this instance: throughout the conflict, the closure of the Strait of Hormuz sent oil prices surging, stoking inflation fears and keeping interest rate expectations elevated, a toxic combination for gold since higher rates lift the opportunity cost of holding a non-yielding asset.
With Hormuz now set to reopen and oil prices falling sharply, the inflation overhang on rate expectations eases, making precious metals more attractive, not less.
The same logic extended to copper giant Antofagasta and silver and gold producer Fresnillo, up 5.17% and 4.16% respectively on the FTSE 100, and gold miner Endeavour Mining, which added 4.20%.
8.10am: UK shares start strongly
As expected, the FTSE 100 made a strong open, rising 91 points in the first few minutes of trading on Monday.
Sentiment was buoyed by a peace deal with Iran, announced late on Sunday (see below), which ultimately could open the Strait of Hormuz, the key shipping route for oil and gas.
Unsurprisingly, Brent crude, the benchmark for oil, was down sharply, dropping 4.5% to around $83 a barrel.
Ahead of the open
The FTSE 100 looks set to open 86 points higher on Monday after President Donald Trump announced a peace deal to end the war between the United States and Iran, triggering a broad rally across global equity markets.
Trump said late on Sunday that the agreement was "now complete," with Pakistan's Prime Minister, Shehbaz Sharif, confirming that a formal signing ceremony would take place on Friday in Switzerland.
Trump also authorised the reopening of the Strait of Hormuz, the critical shipping channel through which roughly a fifth of global oil supply passes, sending US crude prices down nearly 5%.
The deal came despite last-minute uncertainty after an exchange of fire between Israel and Tehran-backed Hezbollah in Lebanon threatened to derail proceedings on Sunday.
Asian markets surged on the news, with South Korea's Kospi leading regional gains, rising 5.56%.
Japan's Nikkei 225 added 4.90%, while the mainland Chinese CSI 300 index rose 1.47%.
Technology stocks were among the biggest beneficiaries, with Japanese investment group SoftBank surging more than 12% and chipmakers Tokyo Electron and Advantest adding 9.19% and 7.69% respectively.
South Korean memory chip giants Samsung Electronics and SK Hynix gained 5% and 6%, respectively.
Ahead of the bell on Wall Street, futures tied to the Dow Jones Industrial Average added 440 points, or around 1%, while S&P 500 futures also climbed 1% and Nasdaq 100 futures rose 1.8%.
US markets enter the week buoyed by Friday's record-breaking initial public offering of SpaceX, the rocket company controlled by Elon Musk, which ended the session with a market capitalisation above $2 trillion after its shares climbed more than 19%.
Investors will also monitor a Federal Reserve policy meeting this week, with futures markets assigning a greater than 98% probability to rates remaining unchanged.
