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Highlights
FTSE 100 advances following US-led ceasefire announcement between Israel and Iran
Oil prices ease as fears of supply disruption temporarily decline
Tensions resurface as Israel alleges breach of truce, launches counter-response
The FTSE 100 moved higher on Tuesday, driven by global geopolitical developments after US President Donald Trump declared a ceasefire agreement between Israel and Iran. This development lifted sentiment in equities tied to the energy and industrial sectors, supporting broader gains across the FTSE markets. In parallel, other indices including the CAC 40 (^FCHI) and the S&P 500 (^GSPC) also posted advances.
The upward movement in UK equities came as the situation in the Middle East appeared to ease temporarily. President Trump posted on social media late Monday that a “Complete and Total CEASEFIRE” had been agreed upon between Israel and Iran, adding that it would take effect early Tuesday morning. The announcement offered some relief to global financial markets, which had been strained following recent US military action targeting Iranian nuclear infrastructure.
Oil markets responded swiftly to the ceasefire update. Brent crude futures (BZ=F) declined, driven by expectations of reduced geopolitical risk to global supply chains. This movement impacted companies within the FTSE 350 energy segment, while also affecting commodity-linked currencies and equities. US crude futures (ES=F) saw similar declines, while safe-haven assets like gold (GC=F) moved lower, reflecting reduced demand amid easing tensions.
Despite the ceasefire announcement, renewed strain emerged shortly after implementation. Reports surfaced early Tuesday indicating that Iran had launched missiles toward a US military facility in Qatar, although the US administration downplayed the event by stating that Tehran had provided advanced notice of the action. This communication appeared to maintain the fragile truce initially.
However, developments later in the day signaled instability in the ceasefire. Israeli defense authorities publicly accused Iran of violating the agreement. In response, Israel's defense minister announced military action targeting regime positions in Tehran. This statement sparked fresh concern in the markets, though initial reactions were muted as investors monitored unfolding events.
Currency movements also reflected the geopolitical shifts. The British pound strengthened against the euro (GBPEUR=X), likely influenced by broader risk-on sentiment and stabilization in energy costs. Market participants appeared to factor in lower near-term volatility following the ceasefire, even as tensions showed signs of resurgence.
The reaction across equity indices varied. The CAC 40 (^FCHI) in Paris gained, reflecting similar optimism seen in London. In the United States, the S&P 500 (^GSPC) and futures markets recorded upward movement, while futures tied to energy commodities adjusted downward.
The FTSE 100 remained a focal point for European investors during the session, with gains concentrated in energy, materials, and industrial names. Stocks with exposure to international trade and commodity flows led the index higher. Lower oil prices provided tailwinds for companies reliant on transportation and manufacturing, easing cost pressures.
Markets now await further clarity on the stability of the truce, which continues to shape sector performance across global exchanges. In the meantime, the shift in energy prices and geopolitical headlines remains a key driver of activity across the FTSE and its related indices.
