UK equities moved higher on Monday after signs of a sustained pause in hostilities between the United States and Iran helped improve investor sentiment and reduced concerns over a broader regional conflict. Continued diplomatic discussions involving Iran and Oman over the reopening of the Strait of Hormuz also supported markets by raising hopes that a key global shipping route could soon return to normal operations.
By 07:35 GMT, the FTSE 100 was up 0.42%, while Germany’s DAX gained 1.3% and France’s CAC 40 added 0.72%. Sterling also strengthened against the U.S. dollar, with GBP/USD rising 0.16% to 1.3345.
The improvement in market confidence follows a third consecutive night without U.S. military strikes on Iran after senior military advisers reportedly recommended suspending the campaign. Diplomatic efforts have continued in an attempt to prevent a renewed escalation of the conflict.
Iran also signalled a temporary reduction in military activity. Army spokesperson Mohammad Akraminia said: “These attacks continued until two nights ago, but over the past two nights the Americans have stopped their attacks.”
He added: “Since… our strategy has essentially been retaliatory, we have also halted our retaliatory operations.”
According to reports, Admiral Bradley Cooper, the senior U.S. military commander in the region, advised President Donald Trump that the campaign had “reached the limits of its effectiveness” after most planned military targets had been exhausted. The assessment was reported to have influenced the decision to suspend further strikes.
However, U.S. officials stopped short of ruling out future military action. Speaking on NBC’s Meet the Press, U.S. Ambassador to the United Nations Mike Waltz said: “I wouldn’t go that far at all. The president is keeping all options on the table.”
Separately, Iranian state broadcaster IRIB reported that six vessels attempting to transit what it described as an “illegal and unsafe” route through the southern Strait of Hormuz were intercepted after allegedly disabling their navigation systems. According to the broadcaster, one vessel was involved in an accident while the remaining ships were turned back under “decisive Iranian management.” IRIB also claimed the vessels had been “provoked by the US military,” although this assertion has not been independently verified.
Attention is now turning to Washington, where Israeli Prime Minister Benjamin Netanyahu is scheduled to meet President Trump on Tuesday in what will be their seventh meeting since January 2025.
Oil prices declined sharply as traders reacted to the apparent easing in geopolitical tensions. U.S. WTI crude fell 5.6% to $84.32 a barrel, while Brent crude dropped 5.2% to $86.94. Gold continued to attract safe-haven demand despite the improved market mood, with gold futures rising 0.84% to $4,104.95 and spot gold advancing 1.2% to $4,102.82.
UK corporate highlights
Among individual stocks, AstraZeneca (LSE:AZN) exceeded second-quarter profit expectations and reaffirmed its outlook for 2026, supported by continued strong sales of its oncology and cardiovascular medicines.
Vodafone (LSE:VOD) upgraded its full-year guidance after delivering a strong start to the financial year, helped by solid underlying trading and the consolidation of its increased stake in Safaricom.
Meanwhile, Cranswick (LSE:CWK) reported higher first-quarter revenue, driven by continued demand for protein products, while leaving its full-year expectations unchanged.
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