The FTSE 100 closed higher on Monday as investors welcomed a temporary pause in hostilities between the US and Iran, easing concerns over energy supplies and sending oil prices sharply lower.
London’s benchmark index gained 45.52 points, or 0.4%, to 10,781.75. The FTSE 250 also rose 0.4% to 23,898.10, while the AIM All-Share slipped 0.2% to 771.69.
Brent crude for September delivery fell below US$90 a barrel, trading at US$89.71, down from US$95.49 at Friday’s close after the US paused airstrikes and Iran halted retaliatory attacks on regional neighbours.
Analysts cautioned that while geopolitical tensions had eased, the underlying conflict remained unresolved, meaning further declines in oil prices could prove difficult.
The weaker oil price weighed on energy producers, with BP falling 2.6% and Shell losing 0.9%. In the FTSE 250, Harbour Energy dropped 5.7%, while Ithaca Energy declined 7.8%.
Vodafone was the day’s best FTSE 100 performer, rising 4.8% after upgrading its full-year earnings guidance. The telecoms group lifted its adjusted EBITDAaL forecast to €13.0 billion-€13.3 billion following strong first-quarter trading, with organic service revenue increasing 5.2% across all business segments.
AstraZeneca added 1.7% after reporting second-quarter earnings ahead of market expectations. Improved margins and a lower-than-expected tax charge helped offset higher operating costs.
Attention now turns to a busy week for corporate earnings, with Lloyds, Barclays and NatWest due to report in the UK, while Meta Platforms, Microsoft, Apple and Amazon headline the US reporting season.
Investors will also be watching interest rate decisions from the Bank of England, US Federal Reserve and Bank of Japan, with all three central banks widely expected to leave borrowing costs unchanged.
Sterling weakened to US$1.3305, while gold traded little changed at US$4,077.10 an ounce.
