London stocks moved higher on Tuesday as investors welcomed lower oil prices and renewed hopes that diplomatic efforts could eventually ease tensions between the US and Iran.
The FTSE 100 gained 34 points to close at 10,373, recovering some of the losses seen earlier in the week as sentiment improved across European markets.
The domestically focused FTSE 250 outperformed, rising 0.57% to finish at 23,378.36, reflecting growing confidence in UK-focused companies despite ongoing geopolitical uncertainty.
Across the Atlantic, Wall Street remained close to record highs even as reports suggested US-Iran peace negotiations had once again stalled. Investors appeared encouraged by the resilience of the US economy and continued enthusiasm surrounding artificial intelligence-related stocks, helping to offset concerns over developments in the Middle East.
Lower bond yields and easing oil prices also supported risk appetite, with traders continuing to bet that any eventual agreement between Washington and Tehran could lead to the reopening of the Strait of Hormuz and a reduction in energy market disruption.
While uncertainty remains over the timing and scope of any potential deal, markets largely shrugged off the latest setbacks in negotiations, focusing instead on improving corporate earnings prospects and expectations that central banks will remain cautious on interest rates.
