Late market roundup: Stocks rise, oil cools on peace deal hopes

The FTSE 100 closed higher on Wednesday, while other stocks also rallied, on hopes for an end to the Middle East war, despite mixed messages from the US and Iran.

‘Investors are pinning their hopes on a 15-point ceasefire deal unveiled by the US despite the proposals apparently being rebuffed by Iran,’ said AJ Bell Head of Markets Dan Coatsworth.

The FTSE 100 index closed up 141.68 points, 1.4%, at 10,106.84.

The FTSE 250 ended up 339.68 points, 1.6%, at 21,475.45, while the AIM All-Share leapt 15.15 points, 2.1%, to 729.24.

The Cboe UK 100 was up 1.3% at 1,004.34, the Cboe UK 250 rose 1.1% to 18,609.96, and the Cboe UK Small Companies Index ended 0.8% higher at 16,929.63.

In European equities on Wednesday, the CAC 40 in Paris closed up 1.1%, while the DAX 40 in Frankfurt ended 1.4% higher.

‘European markets are following the wider global theme of optimism as rumours swirl around the apparent negotiations that could lead us out of the conflict in Iran,’ said Joshua Mahony, chief market analyst at Scope Markets.

‘Dip buyers have started to grab what they can, while oil prices shift lower as the perceived length of time associated with the disruption shortens.’

Stocks in New York were higher. The Dow Jones Industrial Average was up 0.6%, as was the S&P 500 index, while the Nasdaq Composite firmed 1.0%.

Oil prices eased as US President Donald Trump voiced optimism about ending the Middle East war and said officials were ‘in negotiations right now’.

But Iranian state television, citing an unidentified senior official, said that Iran had rejected a peace plan proposed by the US.

‘Iran has responded negatively to an American proposal aimed at ending the ongoing imposed war,’ the official said, according to the English-language broadcaster Press TV.

‘The end of the war will occur when Iran decides it should end, not when Trump envisions its conclusion.’

There has been no official Iranian statement about the reported peace plan. Foreign Minister Abbas Araghchi, who led pre-war talks with the US, has yet to comment.

But Iranian media such as the Mehr and Tasnim agencies have picked up the Press TV report.

Earlier, two senior Pakistani officials said that – in an effort to mediate – Islamabad had conveyed to Iran a 15-point plan containing US proposals to end the nearly month-long war.

But a spokesperson for Iran’s military said the US was ‘negotiating with itself’, adding: ‘Someone like us will never come to terms with someone like you.’

On Tuesday, US President Donald Trump insisted Iran wants a deal ‘so badly’, saying Tehran had given the US a ‘very big present worth a tremendous amount of money’.

Brent oil was quoted at $100.91 a barrel at the time of the London equities close on Wednesday, down from $103.95 late Tuesday.

Morgan Stanley upgraded the oil sector to ’attractive’ from ’in line’, and raised BP to ’overweight’ from ’equal weight’, although it downgraded Shell to ’equal weight’ from ’overweight.

BP rose 1.3% in London, while Shell fell 0.8%.

‘The oil market is unlikely to return to the regime that prevailed before the conflict,’ Morgan Stanley said in a research note.

Morgan Stanley said the path to return to pre-conflict oil prices is ‘narrowing’ as it raised its 2027 forecast Brent estimate to $80 per barrel.

‘Whatever path events take from here, the last four weeks have changed how investors must think about the Strait of Hormuz, effective spare capacity and the value of secure oil supply,’ the bank said.

‘The market has now learned something that it cannot easily unlearn: the flow of oil through the Strait of Hormuz can in fact be cut off. Given the volume of oil involved, that amounts to a structural repricing of geopolitical risk in oil markets,’ it added.

The pound was quoted lower at $1.3377 at the time of the London equities close on Wednesday, compared to $1.3394 on Tuesday.

The euro stood at $1.1572, lower against $1.1591. Against the yen, the dollar was trading higher at JP¥159.19 compared to JP¥158.82.

The yield on the US 10-year Treasury narrowed to 4.32% from 4.38%. The yield on the US 30-year Treasury trimmed to 4.89% from 4.94% on Tuesday.

European Central Bank chief Christine Lagarde said the ECB has several options for dealing with the energy shock, vowing policymakers would not be ‘paralysed by hesitation’.

At its most recent meeting last week, the ECB kept interest rates on hold, while warning of higher inflation and lower growth in the eurozone owing to the war.

On London’s FTSE 100, Croda rose 3.3% as Morgan Stanley upgraded the speciality chemicals firm to ’overweight’ from ’equal-weight’.

‘Croda performs particularly well in an inflationary cycle,’ Morgan Stanley pointed out.

Endeavour Mining rose 4.5% as the gold price climbed. The yellow metal traded at $4,554.59 per ounce on Wednesday, up against $4,421.77 on Tuesday.

But Experian fell 1.4% after after US peer Fair Isaac Corp fell 6.4% in New York on Tuesday.

US Federal Housing Finance Agency Director Bill Pulte wrote on social media that ‘credit score pricing and credit bureau pricing must be more affordable’. US Senator Josh Hawley said he is launching a probe into Fair Isaac. Experian currently charges for more detailed access to credit score information.

On the FTSE 250, RS Group fell 4.5% as it said full-year revenue is set to fall short of forecasts in ‘difficult’ markets, although profit is likely to be marginally ahead of expectations.

Elsewhere, Asos stormed 13% higher as analysts said the online retailer was making progress as it maintained full-year guidance.

‘We are constructive on Asos’s ongoing recovery potential,’ said analysts at Berenberg, noting the sales trend is ‘heading in the right direction’.

But Pinewood Technologies slid 7.7% as it delayed the roll-out of an artificial intelligence system to the second half of the year, and added that it will not meet its annual earnings target.

The biggest risers on the FTSE 100 were Endeavour Mining, up 184.00p at 4,312.00p, Pershing Square Holdings, up 158.00p at 4,128.00p, Anglo American, up 119.00p at 3,173.00p, GSK, up 77.00p at 2,054.00p and ICG, up 57.00p at 1,544.00p.

The biggest fallers on the FTSE 100 were Entain, down 10.60p at 573.80p, Relx, down 37.00p at 2,393.00p, Experian, down 36.00p at 2,530.00p, Bunzl, down 24.00p at 2,156.00p and Shell, down 27.00p at 3,433.00p.

Thursday’s global economic calendar has consumer confidence reports in France and Germany, and US weekly initial jobless claims.

Thursday’s UK corporate calendar has full-year results from clothing and homeware retailer Next.

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