The FTSE 100 finished in positive territory on Tuesday as investors welcomed further signs that tensions in the Middle East may be easing, helping to drive oil prices lower and boosting confidence across several economically sensitive sectors.
London’s benchmark index closed up 0.6% at 10,494.21, while the FTSE 250 slipped 0.2% to 23,326.58 as sharp losses from Rathbones weighed on the mid-cap benchmark.
Market sentiment improved after US President Donald Trump said the Strait of Hormuz would be “completely open” once Washington and Tehran sign a peace agreement expected to take place in Switzerland on Friday. Adding to the optimism, Iranian media reported that three oil tankers and two cargo vessels had already passed through the strategically important waterway.
The prospect of fewer disruptions to global energy supplies sent oil prices lower. Brent crude fell to $79.95 per barrel on Tuesday, down from $83.18 when London markets closed on Monday, easing concerns that a prolonged conflict could reignite inflationary pressures.
The brighter outlook helped lift European equities, with Paris’s CAC 40 rising 0.8% and Frankfurt’s DAX 40 adding 0.1%.
Banks were among the strongest performers in London as investors positioned for improved economic conditions. NatWest gained 2.2%, HSBC advanced 1.8% and Barclays climbed 1.5%.
Housebuilders also attracted buyers, with Barratt Redrow up 1.8% and Persimmon adding 2.5%, reflecting hopes that lower energy costs and greater economic stability could support consumer confidence.
Rolls-Royce extended Monday’s gains, rising a further 2.6% after securing a contract in Sweden linked to small modular nuclear reactor technology.
Across the Atlantic, the Dow Jones Industrial Average touched a fresh record high, although weakness among chipmakers dragged the broader market lower. The S&P 500 fell 0.5% while the Nasdaq Composite dropped 1.1%.
Meanwhile, newly listed SpaceX continued to attract attention with shares in Elon Musk’s company rising for a third consecutive session following last week’s public market debut, briefly overtaking Amazon’s valuation and becoming the world’s fifth-largest listed company.
Within the FTSE 250, Currys jumped 4.2% after RBC Capital Markets upgraded the electricals retailer to “outperform” from “sector perform”. The broker argued that the company is moving beyond a recovery story and could deliver sustained growth supported by cash generation, market share gains and expansion into higher-margin services.
Rathbones moved sharply in the opposite direction, plunging 17% after outlining measures expected to reduce profits by around £60 million over the next two years.
The wealth manager said it has voluntarily suspended new inflows from certain existing high-risk clients until specific requirements are met. The actions follow a skilled person review conducted after engagement with the Financial Conduct Authority.
According to Rathbones, the review identified shortcomings within its UK wealth management operations, including aspects of consumer duty implementation and elements of compliance, oversight and assurance procedures, prompting a series of remedial measures that investors reacted to harshly.