FTSE 100 Rises as Iran Deal Hopes Offset Higher Oil Prices
UK stocks moved modestly higher on Tuesday as investor sentiment improved on cautious optimism surrounding potential U.S.-Iran ceasefire negotiations. The positive mood helped offset concerns over a renewed surge in oil prices, with Brent crude climbing back toward the $100 per barrel mark.
The FTSE 100 gained 0.75%, outperforming broader European markets. In comparison, Germany’s DAX fell 0.28%, while France’s CAC 40 declined 0.38%.
Meanwhile, the British pound weakened by 0.21% against the U.S. dollar, trading at $1.3473.
Oil Prices Rebound Following New U.S. Strikes in Iran
Brent crude rose more than 2%, reversing part of Monday’s decline after U.S. Central Command confirmed defensive military strikes targeting Iranian missile sites and vessels near the Strait of Hormuz.
The Strait of Hormuz remains one of the world’s most important energy routes. Since the conflict began, Iran has significantly restricted non-Iranian shipping activity through the area, disrupting roughly 20% of global oil and liquefied natural gas flows.
Reports also suggested progress toward a possible agreement, with Iran reportedly willing in principle to remove naval mines from the route within 30 days under a developing memorandum of understanding.
UK Inflation Pressures Increase Again
New data from the British Retail Consortium (BRC) showed UK shop price inflation accelerated to 1.2% in May, compared with 1.0% in April.
The increase was largely linked to supply chain disruptions caused by geopolitical tensions and rising energy costs.
Furniture, health, and beauty products recorded some of the strongest price increases, reflecting higher shipping expenses and raw material costs. However, food inflation eased to 2.7%, marking the lowest level in one year.
The BRC called on the UK government to introduce additional measures aimed at reducing cost pressures on businesses and consumers.
Uncertainty Remains Around U.S.-Iran Negotiations
U.S. President Donald Trump stated that Iran’s enriched uranium would either be transferred to the United States for destruction or destroyed locally under coordinated agreements.
A U.S. official indicated Iran had broadly agreed to those conditions.
However, uncertainty surrounding negotiations remains elevated. Iranian Foreign Ministry spokesperson Esmaeil Baqaei warned that shifting positions among U.S. officials continue to complicate diplomatic discussions.
At the same time, U.S. Secretary of State Marco Rubio said a potential agreement could still require several days to finalize, reducing expectations for an immediate breakthrough.
Kingfisher Maintains Outlook Despite Weak Sales Growth
Among UK corporate updates, Kingfisher reported a 0.7% decline in underlying first-quarter sales amid softer market conditions.
Despite weaker consumer activity and a delayed start to the spring season affecting demand, the company maintained its full-year profit guidance, highlighting resilience across its core product categories.
The mixed results suggest continued caution among UK consumers despite improving sentiment in broader financial markets.
