The FTSE 100 closed higher on Monday as a pause in hostilities between the US and Iran eased concerns over energy markets, sending oil prices lower and helping investors focus on a busy week of corporate results and central bank decisions.
The blue-chip index ended the session 0.4% higher, while the FTSE 250 also gained 0.4%.
The US held back from further attacks over the weekend following 13 days of strikes against targets in Iran, with Donald Trump’s UN envoy saying the president was allowing discussions “some space”. Tehran also indicated it would stop retaliatory attacks against neighbouring countries, providing temporary relief for Gulf shipping and the oil sector.
The move pushed Brent crude back below $90 a barrel, with September futures trading at $89.71 on Monday afternoon compared with $95.49 at Friday’s close.
Lower oil prices weighed on energy companies, with BP falling 2.6% and Shell declining 0.9% on the FTSE 100. On the FTSE 250, Harbour Energy dropped 5.7% and Ithaca Energy fell 7.8%.
Vodafone led gains, rising 4.8% after upgrading its full-year earnings outlook. The telecoms group now expects adjusted EBITDA after leases of between €13.0 billion and €13.3 billion, up from previous guidance of €11.9 billion to €12.2 billion.
The company reported organic service revenue growth of 5.2%, with Deutsche Bank noting that performance exceeded consensus expectations across most markets.
AstraZeneca also supported the index, climbing 1.7% after reporting second-quarter revenue in line with forecasts while earnings exceeded expectations. The pharmaceutical company benefited from a lower-than-expected tax charge and improved margins, which helped offset higher costs.
The results marked the beginning of a busy reporting period, with UK lenders including Lloyds, Barclays and NatWest due to publish figures alongside major US technology companies such as Meta Platforms, Microsoft, Apple and Amazon.
Investors are also preparing for interest rate decisions from the Bank of England, US Federal Reserve and Bank of Japan, with all three expected to keep rates unchanged.
DCC Energy gained 0.9% after agreeing to a £5.75 billion takeover by a consortium backed by funds advised by Kohlberg Kravis Roberts and Energy Capital Partners Management.
Pinewood surged 33% after the automotive software provider said it would be minded to recommend a possible £545 million cash offer from Ridgeview Partners, priced at £4.48 per share.
Pharos Energy jumped 27% after accepting a £145.7 million all-cash takeover offer from Serica Energy, although Serica shares fell 7.3% following the announcement.
On the FTSE 250, Vesuvius was one of the biggest fallers, dropping 13% after warning that full-year trading profit would come in below market expectations. The company said operational issues in its Steel division and difficult conditions in Advanced Refractories, particularly across Europe, had continued to affect performance.
Vesuvius now expects full-year trading profit to be slightly above £151.1 million on a constant currency basis, but below analyst expectations of £169 million.
European markets also moved higher, with Paris’ CAC 40 rising 0.4% and Frankfurt’s DAX 40 gaining 1.0%.
In New York, markets were mixed as semiconductor shares came under pressure. The Dow Jones Industrial Average rose around 0.5%, while the S&P 500 was broadly unchanged and the Nasdaq Composite slipped 0.2% as investors reacted to weakness in chip stocks, including Nvidia, which fell more than 4% amid renewed concerns around artificial intelligence investment and competition in semiconductor technology.