April 8 (Reuters) - The UK's FTSE 100 rallied to one-month highs on Wednesday after an agreement between the United States and Iran on a two-week ceasefire, sending global stocks surging and oil
FTSE 100 rallies to over one-month high after US-Iran ceasefire agreement
Market Reaction and Key Developments
April 8 (Reuters) - The UK's FTSE 100 rallied to a more than one-month high on Wednesday after an agreement between the United States and Iran on a two-week ceasefire sent global stocks surging and oil prices sharply lower.
US-Iran Ceasefire Impact
U.S. President Donald Trump announced the agreement late on Tuesday, just two hours before a deadline he had set for Iran to open the blockaded Strait of Hormuz or face the destruction of its "whole civilisation".
Global Shipping and Oil Prices
The last-minute turnaround helped lift sentiment as traders anticipated a revival of shipping through the strait, which handles about one-fifth of global oil and liquefied natural gas shipments.
Regional Tensions
But even as Israel and the United States paused their attacks on Iran, Israel escalated its parallel war in Lebanon.
FTSE 100 and FTSE 250 Performance
The blue-chip FTSE 100 index closed up 2.5% at 10,608.9 points, its highest end-of-day level since March 2, while the midcap FTSE 250 rose 4.1% to its highest since March 11.
Sector Movements
- Heavyweight oil companies, including BP and Shell, dropped 5.8% and 4.7%, respectively, tracking a double-digit plunge in crude prices. [O/R]
- Shell cut its first-quarter gas production outlook while signalling a surge in oil trading profit and a dent to short-term liquidity, offering an early glance into the whiplash effect of the Middle East conflict on oil majors' earnings.
- All the other major FTSE 350 subsectors rose, led by rate-sensitive home builders, banks and travel companies.
- Investors priced in around 32 basis points of tightening by the Bank of England this year compared with 63 bps on Tuesday.
- British house prices fell unexpectedly last month as economic uncertainty stemming from the Iran war hurt buyer demand, according to mortgage lender Halifax.
- British Prime Minister Keir Starmer will travel to the Gulf on Wednesday to hold talks with regional leaders to try to ensure the Strait of Hormuz opens permanently, his office said.
- British telecoms firm Gamma Communications jumped more than 16% after it said it was in preliminary discussions with a number of parties for a potential sale.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Vijay Kishore, Kirsten Donovan)
