Lunchtime market roundup: Stocks rise as investors assess US-Iran deal

Stock prices in London, Paris and Frankfurt were mostly higher at Tuesday midday as investor sentiment in continental Europe was boosted by US-Iran deal hopes, while in London defence stocks were among the main drivers of gains amid ongoing geopolitical uncertainty.

The FTSE 100 index was up 49.96 points, 0.5%, at 10,480.58. The FTSE 250 was down 42.88 points, 0.2%, at 23,319.74, and the AIM All-Share was down 0.75 points, 0.1%, at 804.54.

The Cboe UK 100 was up 0.5% at 1,040.66, the Cboe UK 250 was down 0.2% at 20,032.79, and the Cboe Small Companies was down 0.1% at 18,573.73.

In European equities on Tuesday, the CAC 40 in Paris was up 0.7%, and so was the DAX 40 in Frankfurt.

The European Parliament on Tuesday backed implementing a tariff deal struck last year with the US which will see the EU slash duties on US industrial goods to zero.

The green light is the final political step towards meeting a July 4 deadline set by US President Donald Trump, who has threatened new tariffs on European vehicles unless the agreement is ratified.

Markets continued to assess the implications of a potential agreement between Washington and Tehran. Reports suggested the Trump administration is prepared to support the creation of a $300 billion reconstruction fund for Iran if Tehran agrees to a final settlement that includes a nuclear accord.

A senior US official said Washington has discussed sanctions relief and a substantial investment package tied to Iran’s compliance with a memorandum of understanding that is expected to be formally signed in Switzerland on Friday.

According to people briefed on the talks, the fund would be contingent on a broader agreement that includes a 60-day ceasefire extension, the reopening of the Strait of Hormuz and further negotiations over Iran’s nuclear programme.

However, US President Donald Trump appeared to temper expectations on Tuesday, insisting at the G7 summit in France that the US has ‘no obligation’ to invest in Iran even after a deal is reached.

‘We are not investing any money’ in Iran, Trump said after talks with Qatar’s emir, adding that the main focus of the agreement was ensuring Iran does not obtain a nuclear weapon and warning that ‘all hell’ would ‘rain down’ on the country if it did.

Meanwhile, the head of the International Energy Agency said Tuesday that ‘unconditionally’ opening the Strait of Hormuz to Gulf tanker traffic was essential to ending the shock from soaring oil and gas prices to economies worldwide.

‘The single most important solution to this problem is the fully and unconditionally opening up of the state of Hormuz to shipping,’ IEA chief Fatih Birol told a press conference.

Brent oil traded at $80.98 a barrel early Tuesday, down from $83.18 late Monday.

Investor sentiment in continental Europe received a boost from stronger-than-expected economic survey data.

The latest ZEW survey showed eurozone investor confidence improved sharply in June. The economic sentiment index for the eurozone rose to positive 9.5 points from negative 9.1 in May, comfortably ahead of expectations for a reading of negative 7.2.

In Germany, the closely watched sentiment gauge jumped to positive 10.5 points from negative 10.2, beating forecasts for a more modest improvement to negative 6.0.

However, measures of current economic conditions continued to deteriorate. The eurozone current conditions index fell to negative 43.4 from negative 41.4, while Germany’s gauge weakened to negative 81.0 from negative 77.8.

European carmakers were under pressure after a Financial Times report that hedge funds are betting against the debt and equity of the companies. Renault fell 2.4%, while BMW and Mercedes-Benz both lost 1.0%.

The pound was quoted at $1.3421 midday Tuesday, lower compared to $1.3436 Monday. Against the euro, sterling fell to €1.1555 from €1.1580 a day prior. The euro stood at $1.1609, up softly against $1.1604. Against the yen, the dollar traded at JP¥160.30, up from JP¥160.18.

Back in London, Convatec Group topped the FTSE 100, rising 3.5%.

Defence stocks were among the main drivers of gains amid ongoing geopolitical uncertainty. BAE Systems advanced 2.8%, Rolls-Royce gained 2.5%, and Babcock International added 2.3%.

On the FTSE 250, SDCL Energy Efficiency Income Trust plunged 23% after deciding not to declare a fourth interim dividend for the financial year ended March 31.

The trust said it wants to preserve value and reduce debt as part of its proposed wind-down process. It also noted weaker second-half cash inflows, primarily due to lower receipts from its Onyx asset.

Rathbones Group remained under heavy pressure, down 17%, after revealing the findings of a skilled person review conducted following engagement with the Financial Conduct Authority.

The review identified areas for improvement across the firm’s UK wealth management business, including Consumer Duty implementation and aspects of compliance and oversight. Rathbones plans a two-year remediation programme and expects associated costs of around £60 million.

Frasers Group fell 5.3% to 713.50p after RBC downgraded the retailer to ’underperform’ and set a 750p price target.

Among smaller caps, Cizzle Biotechnology rose 13% after securing US clinical approval for its CIZ1B biomarker test for lung cancer.

MediaZest gained 14% after reporting a sharp improvement in first-half profitability. Revenue increased to £2.7 million from £1.9 million a year earlier, while pretax profit surged to £754,000 from £56,000.

The audiovisual solutions provider said the outlook for the full year is encouraging and is targeting revenue of £5 million in financial 2026, alongside pretax profit of more than £250,000.

Tatton Asset Management climbed 11% after reporting annual profit and revenue ahead of market expectations and raising its total dividend by 42%.

Pretax profit rose 17% to £25.1 million, while revenue increased 20% to £54.4 million. Both figures exceeded market forecasts.

Ferguson Enterprises shares lost 0.3% as it announced its intention to cancel its secondary listing on the London Stock Exchange. The Newport News, Virginia-based heating and plumbing products distributor’s main listing is in New York.

‘Liquidity on the NYSE now far outweighs liquidity on the LSE,’ Ferguson Enterprises said.

Stocks in New York were called mixed. The Dow Jones Industrial Average was called up 0.1%, the S&P 500 index down 0.1%, and the Nasdaq Composite was called flat.

The yield on the US 10-year Treasury was quoted at 4.44%, narrowing from 4.47%. The yield on the US 30-year Treasury was quoted at 4.95%, narrowing from 4.96%.

Gold was quoted at $4,344.10 an ounce at midday Tuesday, down from $4,354.54 on Monday.

Still to come on Tuesday’s economic calendar are US building permits, export and import prices, and the Redbook index, while the latest Federal Open Market Committee meeting gets under way.

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