London stocks are set for a stronger open on Wednesday as easing geopolitical tensions and softer oil prices improve investor sentiment. Futures indicate the FTSE 100 will open around 106 points higher, or 1.0%, after Tuesday’s 1.4% decline.
Market sentiment improved after Donald Trump paused the US naval escort operation through the Strait of Hormuz just one day after its launch. Trump said the decision followed mediation efforts led by Pakistan and other nations, adding that “great progress” had been made in talks with Iran.
Analysts said the move reinforced expectations of de-escalation in the region, helping revive risk appetite across global markets.
Oil prices eased in response, with Brent crude falling to around $108.43 per barrel from $110.70 late Tuesday, reducing immediate inflation concerns tied to energy markets.
Overnight in the US, equities rallied, with the Dow Jones Industrial Average rising 0.7%, the S&P 500 gaining 0.8%, and the Nasdaq Composite climbing 1.0%.
Asian markets also traded higher, with Hong Kong’s Hang Seng Index up 0.9%, China’s Shanghai Composite rising 1.2%, and Australia’s S&P/ASX 200 advancing 1.1%.
In currency markets, sterling edged higher against the dollar to $1.3585, while gold climbed sharply to $4,651 per ounce as investors continued to maintain some defensive positioning despite the improvement in broader market sentiment.
