London stocks are expected to edge higher on Tuesday after Iran and Israel signalled an end to their latest exchange of hostilities, easing concerns that the conflict could derail broader peace negotiations in the Middle East.
Futures indicate the FTSE 100 will open around 6 points higher at 10,379.50, building on Monday’s modest gain that left the blue-chip index at 10,373.20.
Investor sentiment was boosted after both Tehran and Jerusalem indicated that military action had ceased. Israeli Prime Minister Benjamin Netanyahu said the situation had been brought under control, while Iran confirmed it had halted its military operations following a series of retaliatory strikes between the two countries.
The easing of tensions helped push oil prices lower, with Brent crude falling to US$93.06 a barrel from US$94.75 on Monday, reducing concerns about further disruption to global energy supplies and inflation.
In corporate news, pharmaceutical giant GSK is reportedly in discussions to acquire US cancer drug developer Nuvalent in a deal valued at more than US$9 billion, according to the Financial Times. Such a transaction would represent a significant premium to Nuvalent’s market value of approximately US$7 billion.
Overnight, Wall Street delivered a mixed performance, with the Nasdaq Composite rising 0.9% as technology shares recovered, while the S&P 500 gained 0.3%. The Dow Jones Industrial Average slipped 0.2%.
Asian markets were broadly positive, with Japan’s Nikkei 225 climbing 2.1%, while China’s Shanghai Composite gained 0.7%. Hong Kong’s Hang Seng was marginally higher.
Economic data from China showed the country’s trade surplus widened significantly in May as exports and imports both accelerated, providing a positive signal for global trade demand.
Back in the UK, retail sales data showed consumers continued to spend despite economic uncertainty, helped by unusually warm weather during May. Total retail sales rose 3.7% year-on-year, with both food and non-food categories recording solid growth.
Investors will also be watching developments in the artificial intelligence sector after OpenAI confirmed it had confidentially filed paperwork with US regulators that could pave the way for a future stock market listing.
Gold prices edged higher to US$4,350 per ounce, reflecting continued demand for safe-haven assets despite the improvement in geopolitical sentiment.
