LONDON: Stocks gained in London on Tuesday, following three sessions of declines, as oil prices pulled back after US President Donald Trump suggested that the Middle East war could end soon.
The blue-chip FTSE 100 closed up 1.6 percent, while the mid-cap FTSE 250 added 1.8 percent. Both marked their biggest one-day rise in nearly a year.
Trump’s comments on Monday led to a nearly 11 percent drop in oil prices, even as Iran’s Revolutionary Guards vowed to block any Middle East exports if US and Israeli attacks continue, while Britain worked with allies to safeguard shipping.
Global stocks have come under selling pressure since the conflict began as soaring energy prices, driven by disruption in the Strait of Hormuz, stoked fears of a resurgence in inflation.
British assets have been hit harder as investors view the country as more exposed than many other European countries to an energy price shock due in part to its weak public finances and its reliance on gas.
An official at the Office for Budget Responsibility said Britain’s inflation rate could end the year at around 3 percent rather than the roughly 2 percent rate assumed by the country’s fiscal forecasters if energy prices remain at current levels.
The Bank of England is expected to deliver its interest rate decision on March 19 and both Standard Chartered and Morgan Stanley delayed their forecast for a rate cut to the second quarter, citing inflation risks.
Most major subsectors made gains, except the energy index , which fell 1.2 percent, with oil majors Shell down 0.8 percent and BP 2.1 percent lower.
Persimmon shares rose 4.5 percent after the house builder said it expects to deliver more homes in 2026, with profits likely at the top end of estimates.
Domino’s Pizza UK rose 0.2 percent as the fast-food chain bets on its new fried chicken brand to drive growth.
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