- FTSE 100 up 63 points at 10,494
- Rolls-Royce tops leader board
- Brent $83 a barrel
- Scottish Mortgage tops risers
5.05pm: Winning day
London stocks finished Tuesday’s session on the front foot, up 63 points at 10,494.
With a US-Iran peace deal seen certain, oil prices continued to slide about 3%, which IG chief technical analyst Axel Rudolph noted brought it to three-month lows.
“In the UK the focus will be on Wednesday's inflation print and Thursday's monetary policy meeting at which no change is expected but where a more measured tone is likely to be struck, now that energy costs area retreating,” Rudolph said.
2.59pm: Here's a head-scratcher
On the day Frasers Group starts shovelling cash back to shareholders, RBC has decided it doesn't fancy the shares.
The broker cut its rating on the Sports Direct owner to Underperform from Sector Perform, then nudged its target up to 750p from 720p.
Go figure.
Frasers stock has had a good year, up 12% to 753p, bang on where RBC reckons it's worth.
The run, it says, is down to a sunnier mood across retail and Frasers hoovering up its own shares on the cheap.
The maths from here looks one-sided: 47% to lose if the shares slide to 400p, 33% to gain if they hit 1,000p.
Timing aside, a fresh £70 million buyback got going today, hot on the heels of a similar one in December.
Lurking in the background is Frasers' swoop on Hugo Boss, the German suit-maker, which RBC frets could pile on debt.
At 8.5 times forecast 2027 operating profit the shares already look cheap, the price for a sprawling group nobody can easily trade.
1.57pm: Rock and Rolls
Rolls-Royce topped the FTSE 100 with a 3.4% pop, riding a broader bounce in defence names.
The spark? A fresh win for its small modular reactor arm, with Sweden's Videberg Kraft signing up for three of the compact, factory-built nuclear plants.
Citi reckons the prize could be worth 80p to 160p a share, if the SMR story keeps building.
It's the engineer's second international order after the Czech Republic in 2024, but with a twist Citi likes: this time Rolls may not have had to sell a stake to land it.
The broker pegs the global market at a chunky £45 billion, with the boss talking up 400 reactors by 2050.
Rolls-Royce owns 57.8% of the SMR business, and bagging a quarter to half of that market is what underpins Citi's sums.
Win orders without handing over equity, and the maths starts to look rather more interesting.
12.39: London noses ahead of NYC
The FTSE 100 is outpacing its US cousin on Tuesday, up almost 60 points as London rides the same risk-on wave that drove Wall Street to fresh records.
Defence heavyweights Rolls-Royce, BAE Systems and Babcock are doing the heavy lifting, while Scottish Mortgage basks in the glow of SpaceX (NASDAQ:SPCX)'s blockbuster debut.
Across the Atlantic, the mood is cooler, with Wall Street set to catch its breath after a record run as the giddy reaction to peace with Iran gives way to harder questions about oil and the Federal Reserve.
Dow futures ticked up 0.1% after Monday's all-time high, with the S&P 500 flat and the Nasdaq 100 up 0.2%.
The cold water? Reopening the Strait of Hormuz, promised for Friday, looks anything but simple, with warnings it could take months for oil to flow freely.
That leaves a messy backdrop for the Fed, which starts its two-day meeting today with inflation running hot, May's reading hit 4.2%, the highest since 2023.
No one expects a move on Wednesday, the first call under Trump's pick Kevin Warsh, but eyes are on the "dot plot" for hints that hikes loom.
And SpaceX (NASDAQ:SPCX)? Up another 10% before the bell, on course to leapfrog Amazon into fifth place among the world's biggest companies.
11.35: Hot Currys
Currys shares were chased higher after RBC Capital Markets decided the electricals chain had outgrown its turnaround phase.
The broker upgraded to 'outperform' and nudged its target to 180p from 165p, reckoning Currys is now a "multi-year compounder" throwing off cash rather than a recovery punt.
RBC sits a chunky 6% to 8% above the City consensus, and sees a 3% margin landing by 2028, a full five years ahead of its old call.
It also thinks the market is snoozing on iD Mobile, Currys' own mobile network, worth perhaps £260 million on the bank's sums.
Add a World Cup lift to telly sales, healthy net cash, buybacks and shrinking pension bills, and the cash-return story looks comfy.
Full-year numbers are due on 2 July.
One to watch: Nordics boss Fredrik Tonnesen takes the wheel as Alex Baldock heads off to run Boots.
9.46am: Defence stocks well bid
Shares in Rolls-Royce, BAE Systems and Babcock International rose between 2% and 3% in early trading on Tuesday, dominating the FTSE 100 leader board.
The gains came as investors bet on a fresh increase in UK military spending against a darkening geopolitical backdrop heading into the G7 summit.
New defence secretary, Dan Jarvis, is expected to revisit the government's defence investment plan and may press the Treasury for additional funding.
Jarvis replaced John Healey, who resigned last week after refusing to accept a settlement he said left the armed forces short of resources.
Healey had rejected an offer of £13.5 billion to plug an £18 billion gap in the funding of major defence projects.
Sir Keir Starmer has since committed to spending 3% of national income on defence during the next parliament by the end of 2034.
That trajectory points towards larger long-term order books for the three contractors, which already carry multi-year backlogs.
The sector has been among the strongest on the UK market, rerating sharply as Western governments rearm in response to Russia and China.
European budgets are climbing fast, with EU defence spending expected to exceed €392 billion this year, up from €221 billion in 2021.
Tuesday's move also reflected rising tensions abroad, with G7 leaders in France set to discuss the threats from Russia and Iran.
The war with Iran has stretched into a fourth month, while the Royal Marines seized a Russia-linked oil tanker in the Channel at the weekend.
Starmer will use the summit to call for further sanctions on Russia alongside military and energy support for Ukraine.
Analysts caution that valuations look stretched, with Rolls-Royce and BAE Systems trading well above the wider FTSE 100 average.
8.19am: Quiet, but positive start
As predicted, the FTSE 100 made a subdued but positive start, adding 21 points at the open.
Brent is anchored around the low $80s a barrel as the market 'normalises' in the wake of the tentative ceasefire between the US and Iran.
Topping the blue-chip risers is Scottish Mortgage, the tech investor, which has been buoyed by another strong day for Elon Musk's SpaceX (NASDAQ:SPCX).
Ahead of the open
London is headed for a flat start on Tuesday, taking its cue from a mixed session across Asia, where Japanese stocks hit record highs while Hong Kong and mainland Chinese markets lagged on weak economic data.
Japan's Nikkei 225 hit 70,000 points during the session after the Bank of Japan raised interest rates by 25 basis points to 1%, in line with expectations.
The central bank signalled it would continue tapering its asset purchases until April 2027 and said it stood ready to raise rates further should inflation and economic growth develop as anticipated.
The Topix index fell 0.3% despite the broader strength in Japanese equities.
Australian shares were little changed after the Reserve Bank of Australia held interest rates steady, as widely expected.
South Korean stocks outperformed the region, extending a rally in local chipmakers and technology shares.
The mixed Asian session followed a strong lead from Wall Street, where optimism over the US-Iran peace deal drove sharp gains on Monday, with SpaceX (NASDAQ:SPCX) extending its rally following last week's stock market debut.
Futures tied to the S&P 500 slipped 0.1% in Asian trading, with attention turning to this week's Federal Reserve policy meeting.
