UK shares rise as US-Iran peace talk hopes boost sentiment

UK equities moved higher on Tuesday, supported by optimism around potential US-Iran negotiations, even as geopolitical tensions remained elevated with the United States initiating a blockade of Iran’s ports.

The benchmark FTSE 100 index rose 0.1% to 10,593.65 points by 5:58 GMT.

The mid-cap FTSE 250 outperformed, climbing 1.13%.

The gains reflected broader strength across European markets, as investor sentiment improved following reports of possible diplomatic engagement.

US and Iranian negotiators may return to Islamabad later this week to resume talks, raising hopes of easing tensions in the region.

Oil prices drop below $100

Oil prices slipped below $100 per barrel, a key development that influenced sectoral movements across the UK market.

The decline in crude prices weighed on energy stocks but provided a boost to sectors sensitive to fuel costs, such as travel and leisure.

Energy shares fell 0.6%, with Shell and BP both declining more than 0.5%.

The drop reflected investor concerns about reduced revenue prospects amid softer oil prices.

Miners track commodity gains

Mining stocks emerged as one of the strongest performers during the session, supported by rising metal prices.

Precious metal miners advanced 2.6%, tracking gains in gold and silver.

Fresnillo rose 3.5%, while Hochschild Mining gained 2.6%.

Industrial metal miners also posted gains, rising 1.5% overall.

Rio Tinto added 0.7%, and Glencore climbed 1.7% after copper prices reached a one-month high.

The upward movement in commodity prices helped offset broader market uncertainties.

Banking stocks post modest gains

Heavyweight banking stocks also contributed to the market’s positive tone.

The banking index rose 0.4%, with NatWest Group and Standard Chartered both gaining more than 1%. Barclays also edged higher, supporting the overall uplift in the FTSE 100.

The gains in financials reflected improved investor sentiment and a stabilisation in broader market conditions.

Travel stocks benefit from lower fuel costs

Travel and leisure stocks rose 1.8%, benefiting from the decline in oil prices.

Lower fuel costs typically improve margins for airlines and cruise operators.

Carnival shares climbed 2.7%, while airline stocks also moved higher.

EasyJet rose 2.5%, and Wizz Air surged 7.5%, marking one of the strongest gains in the sector.

In contrast, Imperial Brands was among the worst performers on the index.

The tobacco company’s shares dropped more than 7%, hitting nearly a nine-month low.

The decline came after the company flagged uncertainty for the year, citing ongoing Middle East conflicts as a key risk factor.

The warning weighed heavily on investor confidence, leading to a sharp sell-off in the stock.

Intertek stood out on the upside, with shares jumping 11.8% to a one-year high.

The rally followed the company’s announcement that it is considering splitting its business.

The potential restructuring move boosted investor optimism, driving strong buying interest in the stock.

Market sentiment remains cautious

While UK equities ended higher, the gains were modest as investors continued to monitor geopolitical developments closely.

The combination of diplomatic signals and ongoing tensions kept market sentiment cautious.