London stocks are expected to open higher on Tuesday as investors weigh renewed US-Iran diplomatic developments alongside another strong set of banking results from HSBC.
The FTSE 100 is forecast to open around 35 points higher, recovering some of Monday’s modest decline after Wall Street delivered another strong session overnight.
Investor attention remains firmly focused on the Middle East after US President Donald Trump said negotiations with Iran were continuing despite Tehran’s public denials. Trump described the talks as Iran’s “last chance” to reach an agreement, adding that discussions were centred on reopening the Strait of Hormuz and advancing Iran’s denuclearisation. Iran, however, insisted it was negotiating only with Oman regarding shipping access through the strategic waterway.
The uncertainty helped lift Brent crude back to around US$85 a barrel, recovering from Monday’s sharp decline.
Corporate earnings provided a more positive backdrop after HSBC delivered robust first-half results. The banking giant reported a 23% increase in pre-tax profit to US$19.5 billion, driven by higher net interest income and stronger fee revenue. Earnings per share rose 31%, while the bank maintained its interim dividend and announced a fresh US$1 billion share buyback, underlining confidence in its capital position.
Wall Street extended its rally overnight, with the Dow Jones gaining 1.3%, the S&P 500 advancing 1.5%, and the Nasdaq climbing 2.2%, supported by easing inflation concerns and continued strength in technology shares.
Asian markets were mixed on Tuesday. Australia’s ASX 200 outperformed after stronger-than-expected household spending data, while Japan’s Nikkei edged lower and Hong Kong’s Hang Seng slipped despite modest gains in mainland Chinese equities.
Investors will now turn their attention to another busy day of corporate reporting, with results due from BP, Coca-Cola Europacific Partners and Fresnillo, while US trade, factory orders and JOLTS job openings data are expected to provide further insight into the health of the world’s largest economy.
