London close: Stocks rally amid US-Iran peace talk hopes

(Sharecast News) - London stocks rallied on Monday amid renewed optimism over US-Iran peace talks.

The FTSE 100 closed up 1.3% at 10,323.75, while sterling was 0.7% higher against the dollar at 1.3419. At the same time, Brent crude was ahead 1.6% at $110.96 a barrel and West Texas Intermediate was 1.4% firmer at $106.98.

Sentiment was boosted by a report that Pakistan has shared ​with the US ‌a revised proposal from Iran to ​end the Middle East conflict. When asked if it would take time to close the gaps, a Pakistani source told Reuters: "We don't have ‌much ⁠time," ​adding that ​both ⁠countries "keep changing their goalposts".

The mood was lifted further after semi-official Iranian news agency Tasnim, citing an unnamed source close to the negotiating team, said the US has agreed to temporarily waiver sanctions on Iranian oil while discussions to end the war continue.

News of the apparent progress in talks came after Trump warned over the weekend that Iran was running out of time for peace talks. The US president said on Truth Social that "the clock is ticking" for Iran, and "they better get moving, fast, or there won't be anything left of them".

Chris Beauchamp, chief market analyst at IG, said: "It has been another of those odd 'stocks up, oil up' days that have become such a feature of the global financial markets since the beginning of March. After looking decidedly weak this morning, rescue arrived in the form of signs that the US and Iran were once again talking, and that, even more importantly, a small unthawing of relations was underway.

"For two such implacable foes, the signs that they are capable of making concessions in pursuit of a deal is just what markets need to see, and investors grabbed the opportunity with both hands."

It was also reported that Iran's updated proposal for a deal to end the war has been deemed insufficient by the US, although this failed to dent the mood.

According to Axios, citing a source briefed on the issue, the White House believes the latest proposal by Iran is not a meaningful improvement. US officials say President Trump wants a deal to end the war, but is considering resuming it due to Iran's rejection of many of his demands and refusal to make meaningful concessions on its nuclear program, Axios reported.

On home shores, former health secretary Wes Streeting confirmed over the weekend that he would run for prime minister if a leadership contest is triggered. Investors were also reacting to news that Greater Manchester mayor Andy Burnham has been cleared to stand in the upcoming Makerfield by-election in a bid to become an MP and challenge Keir Starmer.

Looking to reassure markets, Burnham said in an interview over the weekend that he supports the current fiscal rules as well as a plan to get debt down. The 10-year gilt yield and the 30-year gilt yield both eased on Monday, having surged last week on the prospect of a potential leadership challenge from Burnham.

Kathleen Brooks, research director at XTB, said: "The key test for UK markets will be whether the 10-year yield can fall below the 5% level, and if the 30-year yield is trusting enough of Burnham to back away from 1998- level highs."

In equity markets, Relx, Pearson and Experian, all of which have been hit in recent months by concerns about disruption from AI, were among the top performers.

Oil giants BP and Shell gushed higher in tandem with oil prices.

Defensive stocks were also in demand, with utilities Centrica, National Grid and SSE all in the black.

On the downside, 3i Group was under the cosh again, having tumbled last week after the private equity and infrastructure investment firm pointed to slowing sales at its biggest holding, Dutch discount retailer Action.

Miners Antofagasta and Anglo American fell after data showed China's economy faltered in April, with both retail sales and industrial production significantly undershooting forecasts. Anglo was also in focus after agreeing to sell its portfolio of steelmaking coal mines in Australia to UK mining company Dhilmar for up to $3.9bn in cash.

Housebuilder Vistry tumbled following a report over the weekend suggesting the housebuilder has ordered subcontractors to halt work on new developments to preserve cash.

Market Movers

FTSE 100 (UKX) 10,323.75 1.26%

FTSE 250 (MCX) 22,611.70 0.07%

techMARK (TASX) 5,861.40 0.49%

FTSE 100 - Risers

Centrica (CNA) 196.95p 4.07%

Babcock International Group (BAB) 981.80p 3.87%

National Grid (NG.) 1,231.50p 3.66%

Pearson (PSON) 1,136.50p 3.37%

Relx plc (REL) 2,504.00p 3.34%

SSE (SSE) 2,345.00p 3.26%

Shell (SHEL) 3,289.50p 3.23%

Flutter Entertainment (DI) (FLTR) 7,200.00p 3.15%

Bunzl (BNZL) 2,400.00p 2.92%

International Consolidated Airlines Group SA (CDI) (IAG) 385.40p 2.86%

FTSE 100 - Fallers

3i Group (III) 2,082.00p -5.79%

Airtel Africa (AAF) 312.80p -3.99%

Mondi (MNDI) 734.60p -2.18%

Smurfit Westrock (DI) (SWR) 2,806.00p -1.92%

Diploma (DPLM) 6,625.00p -1.41%

Anglo American (AAL) 3,781.00p -1.36%

Intertek Group (ITRK) 5,550.00p -1.16%

Antofagasta (ANTO) 3,786.00p -1.10%

Metlen Energy & Metals (MTLN) 38.50p -0.98%

Persimmon (PSN) 1,040.50p -0.57%

FTSE 250 - Risers

Ocado Group (OCDO) 198.40p 6.15%

WPP (WPP) 274.80p 4.93%

Hays (HAS) 31.00p 3.96%

THG (THG) 32.68p 3.88%

WH Smith (SMWH) 470.00p 3.25%

Dr. Martens (DOCS) 64.30p 3.21%

Pennon Group (PNN) 504.00p 3.19%

Lancashire Holdings Limited (LRE) 639.00p 3.06%

Dunelm Group (DNLM) 744.00p 2.69%

SDCL Efficiency Income Trust (SEIT) 43.40p 2.60%

FTSE 250 - Fallers

Vistry Group (VTY) 264.60p -4.82%

Morgan Sindall Group (MGNS) 4,352.00p -3.84%

Aston Martin Lagonda Global Holdings (AML) 47.72p -3.79%

Oxford Instruments (OXIG) 2,852.00p -3.52%

Ashmore Group (ASHM) 210.00p -3.49%

Wizz Air Holdings (WIZZ) 918.50p -3.26%

Impax Environmental Markets (IEM) 449.00p -3.02%

Tate & Lyle (TATE) 521.00p -2.80%

Harworth Group (HWG) 124.80p -2.65%

HGCapital Trust (HGT) 341.00p -2.57%