London stocks are set for a firmer start on Tuesday as easing oil prices and renewed optimism surrounding US-Iran negotiations help improve investor sentiment following Monday’s sell-off.
Futures indicate the FTSE 100 will open around 34 points higher at 10,372.95, recovering some of the previous session’s 0.7% decline.
Sentiment was boosted after US President Donald Trump suggested a framework agreement with Iran could be reached within days, potentially paving the way for the reopening of the Strait of Hormuz and an extension of the current ceasefire.
According to reports, Trump said a memorandum of understanding could be completed “over the next week”, although he noted that several outstanding issues still need to be resolved before any final agreement can be signed.
The prospect of progress in negotiations weighed on energy markets, with Brent crude retreating to US$93.89 a barrel from US$97.22 on Monday as traders priced in a reduced risk of prolonged disruption to global oil supplies.
Trump also claimed that Israel and Hezbollah had agreed to halt hostilities following discussions involving Israeli Prime Minister Benjamin Netanyahu and representatives linked to the Lebanese militant group. However, there has been no independent confirmation of any agreement, while Iran’s Tasnim news agency reported that Tehran had suspended talks with mediators in response to Israel’s expanding military operations in Lebanon.
On Wall Street, US equities extended their recent gains, with the Dow Jones Industrial Average rising 0.1%, the S&P 500 adding 0.3% and the Nasdaq Composite advancing 0.4%.
Asian markets were mixed overnight. Hong Kong’s Hang Seng climbed 1.9% and China’s Shanghai Composite gained 0.5%, while Japan’s Nikkei 225 fell 0.6%.
In currency markets, sterling edged higher to US$1.3466, while the euro strengthened to US$1.1638. Gold rose to US$4,525 an ounce as investors maintained some exposure to safe-haven assets amid ongoing geopolitical uncertainty.
