(Reuters) -London stocks climbed on Tuesday in broad-based gains after a ceasefire between Israel and Iran came into effect, ending a 12-day conflict that temporarily spiked oil prices and dampened
UK Midcap Stocks Surge as Travel Sector Rallies on Ceasefire News
(Reuters) -The UK's midcap stocks gained on Tuesday, with travel stocks in the lead as investors took comfort from signs of easing tensions in the Middle East and an upbeat forecast from cruise operator Carnival.
The domestically oriented FTSE 250 index rose 1% to a more than one-week high.
Carnival's UK-listed shares jumped 11.8%, topping gains in the midcap index, after the company raised its annual profit forecast and beat second-quarter earnings estimates.
The FTSE 350 travel & leisure index rose 3.6%, mirroring gains in the sector globally, after U.S. President Donald Trump announced that Israel and Iran had reached a ceasefire to end their 12-day-old war.
Both sides accused each other of violating the truce on Tuesday. Still, there was a sense of relief that a path out of war had been charted.
Oil prices tumbled 5% on expectations the ceasefire will reduce the risk of oil supply disruptions. [O/R]
British oil majors BP and Shell dropped 4.8% and 3.8%, respectively, weighing heavily on the FTSE 100 index.
The exporter-heavy index closed flat, also weighed down by a 0.6% jump in the pound.
British grocery price inflation rose to 4.7% for the four weeks to June 15, its highest level since February last year, dealing another blow for low-income households, data from market researcher Kantar showed.
Bank of England Governor Andrew Bailey said there were now signs that Britain's labour market was softening and he repeated his view that interest rates are likely to continue falling. The BoE left interest rates on hold at 4.25% this month.
Markets are pricing in the likelihood that the central bank will lower borrowing costs by about 50 basis points by year-end.
Among other stocks, SThree climbed 7.4% after the recruiter said improving contractual hiring in the U.S. market, its second-biggest, helped it slow a decline in fee income and maintain its annual profit target.
(Reporting by Twesha Dikshit and Sruthi Shankar; Editing by Shailesh Kuber and Joe Bavier)
