LONDON MARKET EARLY CALL: FTSE 100 higher on renewed peace hopes

(Alliance News) - Stocks in London are set to open higher on Wednesday, while oil prices are lower, after the US paused its military operation to escort ships through the Strait of Hormuz after just one day.

US President Donald Trump's so-called "Project Freedom" to help vessels leave the narrow chokepoint to the Gulf, where Iran has seized control, began on Monday. But the US leader said on Truth Social that he was now pausing it after a request by mediator Pakistan and other countries, saying that "great progress has been made toward a complete and final agreement" with Tehran.

IG says futures indicate the FTSE 100 to open up 106.1 points, 1.0%, on Wednesday. The index of London large-caps closed down 1.4% at 10,219.11 on Tuesday.

"Risk appetite rebounded, by and large, helped not only by calmer tones prevailing...it remains the case, judging by public comments, that the US has little-to-no desire to return to major kinetic actions, with it also being the case that the Iranians seem to have little appetite to do so either," Pepperstone's Michael Brown commented. "Taking that into account, in many ways nothing has really changed over the last two days – the two sides remain engaged in talks, the ceasefire remains in place, and the Strait of Hormuz remains (largely) impassable.

"Added to which, overnight, President Trump has again touted the 'great progress' being made in those talks, further boosting risk appetite. Zooming out, then, we remain on the path towards de-escalation, and towards an end to the conflict."

Brent oil was trading at USD108.43 a barrel early Wednesday, lower than USD110.70 late Tuesday.

Sterling was quoted at USD1.3585 early Wednesday, higher than USD1.3569 at the London equities close on Tuesday. Against the euro, sterling fell to EUR1.1574 from EUR1.1586 a day prior.

The euro traded at USD1.1733 early Wednesday, higher than USD1.1707 late Tuesday. Against the yen, the dollar was quoted lower at JPY156.31 versus JPY157.66.

In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average up 356.35 points, 0.7%, the S&P 500 up 58.47 points, 0.8%, and the Nasdaq Composite up 258.33, 1.0%.

In Asia on Wednesday, Tokyo markets were closed for Constitution Memorial Day. In China, the Shanghai Composite was up 1.2%, while the Hang Seng index in Hong Kong was up 0.9%. The S&P/ASX 200 in Sydney was up 1.1%.

Gold was quoted at USD4,651.05 an ounce early Wednesday, higher than USD4,576.51 on Tuesday.

In Wednesday's corporate calendar, Next and Diageo release trading updates, Trainline releases full-year results, and Flutter releases first-quarter results.

In the economic calendar on Wednesday, there are composite PMI releases from the eurozone, Germany and the UK.

By Emma Curzon, Alliance News reporter

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