FTSE 100 Surges as US-Iran Ceasefire Triggers Oil Price Collapse

The FTSE 100 climbed nearly 3% at midday on Wednesday, gaining 293.48 points to reach 10,642.27. The surge followed the announcement of a two-week ceasefire between the U.S. and Iran, aimed at stabilizing the critical energy corridors of the Middle East. The geopolitical breakthrough immediately impacted energy markets, with Brent crude futures plummeting as much as 14% to $91 per barrel. This sharp correction in oil prices has significantly reduced investor concerns regarding inflation and global economic growth, sparking a broad-based rally across multiple sectors. U.S. President Donald Trump described the agreement as a victory for diplomacy, noting that Iran has signaled a desire for lasting stability. The deal facilitates the resumption of shipping through the Strait of Hormuz, although transit fees may be levied by Iran and Oman. Additionally, the agreement calls for a cessation of hostilities between Israel and Hezbollah in Lebanon. The equity rally was led by mining and banking stocks. Antofagasta, Anglo American, and Fresnillo saw gains exceeding 10%, while major UK banks including Barclays and Lloyds rose between 7% and 8%. However, the energy sector lagged, with Shell and BP falling 5.5% and 5.2%, respectively, as oil prices tanked. Despite the equity surge, domestic UK data remained weak. The construction Purchasing Managers' Index (PMI) fell to 45.6 in March, and Halifax reported a 0.5% monthly decline in house prices, reflecting the lingering impact of previous geopolitical volatility on inflation expectations.