The FTSE 100 traded higher on Tuesday, recovering from the previous session’s losses as investors welcomed an improvement in UK house prices while closely following developments at the NATO summit in Ankara and ongoing tensions in the Middle East.
The UK’s benchmark index gained 0.25% after Monday’s 0.3% decline. Elsewhere in Europe, Germany’s DAX slipped 0.22%, while France’s CAC 40 advanced 0.58%. Sterling edged 0.07% lower against the US dollar to 1.3379.
Fresh housing data showed the UK property market returned to growth in June, with the Lloyds House Price Index recording a 0.2% monthly increase. The average home price rose to £299,330 from £298,812 in May, while annual house price growth edged up to 0.6% from 0.5%. Northern Ireland remained the strongest-performing region, posting annual growth of 7.4%, whereas London recorded a 1.1% year-on-year decline, leaving the average property price at £534,831.
Commenting on the market, Amanda Bryden, Head of Mortgages at Lloyds, said:
“Mortgage rates have eased from their recent highs, offering some encouragement to those considering a move.”
She added:
“The outlook for house prices will depend largely on inflation continuing to ease and household confidence gradually improving.”
Meanwhile, geopolitical risks remained firmly in focus after a tanker caught fire in the Strait of Hormuz following a reported projectile strike, marking the latest disruption to commercial shipping since the outbreak of the conflict between the United States and Iran.
Diplomatic negotiations between Washington and Tehran remained suspended during the funeral period for Iran’s Supreme Leader, Ali Khamenei. Speaking at the White House before departing for Ankara, US President Donald Trump said the United States would prevail in the conflict “one way or the other,” adding that Washington could destroy Iran’s electricity infrastructure in the “small part of an afternoon.”
Attention also turned to the two-day NATO summit in Ankara, where alliance leaders are expected to discuss plans to implement last year’s commitment to increase defence spending from 2% to 3.5% of GDP by 2035. The meeting coincides with a major defence industry exhibition aimed at securing multi-billion-dollar procurement agreements, while President Trump is also expected to hold bilateral talks with the presidents of Ukraine and Syria.
In commodity markets, Brent crude climbed 1.28% to $72.91 a barrel and US West Texas Intermediate crude gained 1.20% to $69.37. Gold prices moved lower, with futures falling 0.63% to $4,141.31 an ounce and spot gold declining 0.84% to $4,129.42.
UK corporate highlights
Shell (LSE:SHEL) increased its guidance for second-quarter integrated gas production, although it cautioned that output will remain well below first-quarter levels following the shutdown of its Pearl GTL facility in Qatar after the Ras Laffan attack.
HSBC (LSE:HSBA) is scaling back higher-risk private credit lending in favour of lower-risk funds, according to a Financial Times report, as concerns grow over underwriting standards in the private credit market.
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