The FTSE 100 is expected to open around 38 points, or 0.4%, higher at 10,746.53 on Wednesday, recovering from Tuesday’s 0.3% decline as investors welcomed renewed diplomatic contact between the US and Iran.
US President Donald Trump said American officials had held a three-hour meeting with Iranian representatives in New York, describing the discussions as productive, although significant differences remain and further talks will be required before any settlement can be assessed.
The prospect of easing Middle East tensions has continued to pressure energy prices, with Brent crude falling to around $98.49 a barrel, extending its retreat from above $100 earlier in the week. Iran has separately indicated it could reopen the Strait of Hormuz if US military pressure and restrictions are eased.
Wall Street was mixed overnight, with the Dow down 0.4% and the S&P 500 broadly flat, while the Nasdaq gained 0.5%, continuing to benefit from strength in technology shares.
Asian markets were weaker, with China’s Shanghai Composite down 0.4% and Hong Kong’s Hang Seng falling 1.0%, while Japanese markets remained closed for a public holiday.
Sterling weakened to around $1.332, while gold was broadly steady at approximately $4,329 an ounce.
UK Prime Minister Andy Burnham is also using this week’s UN General Assembly to push international cooperation on artificial intelligence, with the government planning to make AI a major priority of the UK’s 2027 G20 presidency.
For London investors, attention now turns to flash PMI readings from the UK, eurozone and US, which will provide fresh indications of economic activity and inflation pressures, alongside half-year results from JD Sports Fashion.
