The FTSE 100 made strong progress on Monday, despite continued oil price strength, on renewed hopes for a peace deal in the Middle East.
The FTSE 100 closed up 160.61 points, 1.6%, at 10,127.96.
The FTSE 250 ended down 10.25 points, 0.1%, at 20,954.50, and the Aim All-Share advanced 4.49 points, 0.6%, at 710.12.
On Monday, US President Donald Trump wrote on his Truth Social network that the US is in “serious discussions” with “a more reasonable regime” in Tehran, the Iranian capital.
In addition, US secretary of state Marco Rubio voiced hope for working with elements within Iran’s government, saying the US privately had received positive messages.
Mr Rubio said there were internal “fractures” inside the Islamic republic and that the US hoped that figures with “power to deliver” take charge.
“We are hopeful that that’s the case,” Mr Rubio told ABC News programme Good Morning America.
Meanwhile, Pakistan on Sunday said it was ready to broker and host “meaningful talks” between Washington and Tehran to end the war.
But Iran’s parliament speaker Mohammad Bagher Ghalibaf said the US was “secretly planning a ground attack”.
Mr Trump warned if a deal is not reached shortly then the US will blow up and obliterate all Iran’s electric generating plants, oil wells and Kharg Island.
In another concerning development, Yemen’s Houthi movement confirmed it had fired ballistic missiles at Israeli military sites in support of Iran and allied Hezbollah forces.
JPMorgan analyst Natasha Kaneva said while the Houthi involvement is “not yet decisive, it introduces a second maritime pressure point in the Red Sea, alongside the Strait of Hormuz”.
“In effect, two major corridors of global energy trade are exposed simultaneously, narrowing rerouting options and increasing system-wide supply-chain risk,” she noted.
Ms Kaneva said in practical terms, that places roughly five million barrels of oil per day of Saudi Arabia bypass capacity at risk, a vulnerability that could add 20 dollars (£15) per barrel to oil prices.
Brent oil traded higher at 112.46 dollars a barrel on Monday afternoon, from 111.63 dollars late on Friday.
Reflecting the increased oil price, shares in oil majors BP and Shell rose 3.1% and 2.0% respectively.
On the FTSE 250, oil and gas exploration firms Ithaca Energy and Harbour Energy firmed 2.6% and 2.7% respectively.
In London, bosses from energy, shipping and banking firms met with Primer Minister Sir Keir Starmer to discuss Iran’s ongoing blockade of the Strait of Hormuz.
The summit at No 10 is expected to be followed by a Cobra meeting on Tuesday, where senior ministers will discuss the ongoing economic hit caused by the war.
“We are bringing together the shipping sector, insurance and energy, because obviously that’s a focus of concern,” Sir Keir said.
“I will have a Cobra tomorrow, another Cobra, to look at the economic impacts of the war and making sure that everything that we need to have in place, everything is monitored and audited properly,” he added.
In European equities on Monday, the Cac 40 in Paris closed up 0.9%, while the Dax 40 in Frankfurt ended 1.2% higher.
Stocks in New York were higher.
The Dow Jones Industrial Average was up 0.7%, the S&P 500 index was 0.3% higher, and the Nasdaq Composite rose 0.1%.
Amid the equity market gains, AJ Bell head of financial analysis Danni Hewson said markets remain nervous.
“Comments from President Trump about seizing Iranian oil and the country’s Kharg Island export hub, a build-up of US troops and the involvement of Tehran-backed Houthis in the war all create the impression of a conflict that is escalating rather than drawing to a close,” she said.
The yield on the US 10-year Treasury narrowed to 4.34% on Monday from 4.42% on Friday.
The yield on the US 30-year Treasury fell to 4.90% from 4.95%.
The pound fell to 1.3191 dollars on Monday afternoon from 1.3288 dollars at the equities close on Friday.
Against the euro, sterling fell to 1.1518 euros from 1.1554 euros.
The euro stood lower against the greenback at 1.1452 dollars from 1.1521 dollars.
Against the yen, the dollar was trading lower at 159.53 yen compared to 160.10 yen.
Gold rose to 4,541.34 dollars an ounce on Monday from 4,517.90 dollars at the same time on Friday.
On the FTSE 100, Marks & Spencer rose 1.9% as Worldpanel data for the 12 weeks to March 1 showed clothing sales growth accelerated to 3.2% year-on-year from 1.0% in the prior period.
In addition, the London-based clothing, food and homeware retailer said on Sunday its fashion products will be sold for the first time in the US after it agreed a deal with department store Nordstrom.
Rio Tinto rose 3.5% as it said its iron ore port operations have resumed, after tropical cyclone Narelle passed over Western Australia’s Pilbara region.
The miner said recent weather events have impacted iron ore shipments by around 8 million tonnes, but that it has a pathway to recover about half of the losses.
Rio Tinto’s Pilbara iron ore shipment guidance for 2026 remains unchanged at 323 million to 338 million tonnes.
Land Securities rose 3.8% as Goldman Sachs upgraded to “buy” from “neutral” noting valuations in the sector are back close to 2009 levels.
But the rising oil price weighed on British Airways owner, International Consolidated Airlines, down 1.9%, while Asia-focused insurer Prudential fell 0.5%.
Elsewhere, boohoo rose 2.4% as it hailed stronger-than-expected trading in financial 2026, and provided upbeat guidance for the year ahead.
The Manchester-based fast fashion e-retailer, which trades as Debenhams, said it expects financial 2027 adjusted earnings before interest, taxes, depreciation and amortisation to grow at a double-digit percentage rate.
It also expects a significant improvement in free cash flow resulting from “materially lower exceptional costs”.
“Our multi-year turnaround strategy continues at pace,” said chief executive Dan Finley.
“There has been clear progress in Debenhams, and management, who are well incentivised, appear motivated to return the business back to growth,” said Shore Capital analyst Katie Cousins.
The biggest risers on the FTSE 100 were Burberry Group, up 46.5p at 1,073.0p, London Stock Exchange Group, up 356.0p at 8,602.0p, Centrica, up 8.6p at 210.5p, British Land, up 13.4p at 356.6p and Land Securities, up 20.0p at 552.0p.
The biggest fallers on the FTSE 100 were Antofagasta, down 105.0p at 3,161.0p, International Consolidated Airlines, down 6.7p at 349.5p, Airtel Africa, down 5.4p at 347.8p, Lion Finance, down 140.0p at 9,185.0p and Reckitt Benckiser, down 62.0p at 5,102.0p.
Tuesday’s global economic calendar has GDP figures in Canada and the UK, French and Italian CPI data, and house price reports in the US.
Tuesday’s local corporate calendar has full year results from Irn-Bru maker AG Barr and mini-computer manufacturer Raspberry Pi.
– Contributed by Alliance News
