Global stock markets rallied on Monday after news of a peace agreement between the United States and Iran boosted investor confidence and sent oil prices sharply lower.
The Ftse 100 rose 0.8 per cent at the opening bell to 10,551.84, while the Ftse 250 climbed 1.2 per cent as traders welcomed signs that tensions in the Middle East could be easing.
On the Ftse 100, Fresnillo is the strongest performer, climbing 4.2 per cent, with Berkeley Group up 3.5 per cent.
The biggest faller is Endeavour Mining, down 1.7 per cent.
Across the Ftse 250, Molten Ventures leads the mid‑caps with a five per cent gain, while Hochschild Mining is the weakest, slipping 2.9 per cent.
On the AIM 100, Thor Explorations tops the index, rising 5.3 per cent, as Serica Energy drops 4.2 per cent to the bottom of the table.
Asian markets recorded even stronger gains overnight, led by Japan and South Korea.
Tokyo’s Nikkei 225 surged 5.1 per cent to a record high of 69,367.06, while South Korea’s Kospi jumped 5.6 per cent.
Australia’s S&P/ASX 200 rose 1.4 per cent and Taiwan’s Taiex advanced 2.6 per cent.
Technology stocks were among the strongest performers across the region.
Japanese investment company SoftBank rose more than 12 per cent, while South Korean chipmakers Samsung Electronics and SK Hynix also recorded substantial gains.
The market rally came as oil prices tumbled following confirmation of a peace agreement and expectations that shipping through the Strait of Hormuz could soon resume.
Global stock markets rally as Donald Trump announces US-Iran peace deal and oil prices plunge
|
GETTY
Brent crude, the international benchmark, fell more than four per cent to around $83 per barrel during early Asian trading.
The decline left Brent at its lowest level since March.
US benchmark crude also dropped by more than four per cent to approximately $81 per barrel.
President Donald Trump said he had authorised the “toll free opening of the Strait of Hormuz” alongside the “immediate removal of the United States Naval blockade”.
Posting on Truth Social, Mr Trump said: “Ships of the World, start your engines. Let the oil flow!”
The Strait of Hormuz is one of the world’s most important energy routes and carries around one-fifth of global oil and natural gas shipments.
Pakistani Prime Minister Shehbaz Sharif said a formal signing ceremony for the agreement would take place in Switzerland on Friday.
Iran confirmed the agreement had been reached but indicated that implementation would not begin until the official signing takes place.
The deal offers relief to investors after more than 100 days of uncertainty following the outbreak of conflict in late February.
Negotiations over wider issues, including Iran’s nuclear programme, are expected to continue during a 60-day period following the agreement.
The breakthrough came despite renewed tensions on Sunday when an exchange of fire between Israel and Tehran-backed Hezbollah in Lebanon threatened to disrupt the peace process.
Mohammad Bagher Ghalibaf, Iran’s chief negotiator, had earlier questioned the value of continuing discussions and said there was “no point” in further talks.
The Ftse has sustained a climb over the last five days
|
GOOGLE FINANCE
Mr Trump later said the strike on Beirut “should not have happened”.
The prospect of lower energy prices has also prompted fresh discussion about the outlook for interest rates.
Laura Lambie, senior investment director at Rathbones, told BBC Radio 4’s Today programme that rate cuts were becoming “more likely over time” and that Britain “may well, if we’re lucky, see a rate cut by the end of the year”.
Stephen Innes, managing partner at SPI Asset Management, said: “Oil down takes the inflation impulse down.”
The Bank of England is widely expected to leave interest rates unchanged at 3.75 per cent when policymakers meet on Thursday.
Financial markets have also reduced expectations of any further interest rate increases as lower energy costs are expected to ease inflationary pressures.
Sterling strengthened 0.3 per cent against the dollar to $1.344 as investors moved away from traditional safe-haven assets.
Analysts warned, however, that while markets have responded positively to the agreement, it could still take months before oil flows through the region return to normal levels.