LONDON MARKET EARLY CALL: FTSE 100 seen down on Iran ceasefire fears

(Alliance News) - Stocks in London are set to open lower on Tuesday, as investors weigh uncertainty over the fragile Iran ceasefire and growing pressure on Keir Starmer's leadership as UK prime minister.

IG says futures indicate the FTSE 100 to open down 59.4 points, 0.6%, at 10,210.03 on Tuesday. The index of London large-caps closed 0.4% higher at 10,269.43 on Monday.

US President Donald Trump said the Iran ceasefire was on "life support" and that he was considering restarting US naval escorts through the Strait of Hormuz as he pushes for what he described as "complete victory" in the conflict.

Speaking amid mounting pressure over the economic impact of the war, Trump said Iran's rejection of Washington's latest demands had left the already fragile ceasefire "unbelievably weak". He also told Fox News he was weighing a revival of Operation Freedom, a previous US effort to escort commercial shipping through Hormuz, although no final decision had been taken.

Iranian parliamentary speaker Mohammad Bagher Ghalibaf, who previously served as Tehran's chief negotiator in talks with Washington, responded by saying Iran was prepared "for any eventuality".

Brent oil was trading at USD104.98 a barrel early Tuesday, higher than USD103.70 late Monday.

Trump also said he planned to suspend the federal gasoline tax as Americans grapple with surging fuel costs linked to the Iran conflict. Speaking at the White House, he said the measure would remain in place "till it's appropriate".

According to the US Energy Information Administration, federal fuel taxes currently amount to 18.4 cents per gallon on gasoline and 24.4 cents per gallon for diesel. Any suspension would require approval from Congress, where Republicans hold narrow majorities in both chambers.

In the UK, Prime Minister Keir Starmer faces the biggest leadership crisis of his premiership, with cabinet ministers reportedly urging him to consider his position and several government aides resigning.

Reports suggested Home Secretary Shabana Mahmood privately called for an orderly transition of power after 75 of Labour's 403 MPs demanded Starmer step down following last week's election losses. Four government aides also quit, citing a loss of confidence in his leadership, while others warned his authority was rapidly weakening.

Sterling was quoted at USD1.3573 early Tuesday, lower than USD1.3651 at the London equities close on Monday. Against the euro, sterling fell to EUR1.1545 from EUR1.1584 a day prior.

The euro traded at USD1.1755 early Tuesday, lower than USD1.1782 late Monday. Against the yen, the dollar was quoted at JPY157.72, higher versus JPY157.01.

In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.2%, the S&P 500 up 0.2% and the Nasdaq Composite up 0.1%.

In Asia on Tuesday, the Nikkei 225 index in Tokyo was up 0.5%.

Data from Japan's Statistics Bureau showed household spending fell 2.9% year-on-year in March, a sharper decline than February's 1.8% drop and worse than the FXStreet-cited consensus forecast for a 1.3% decline. Meanwhile, average monthly household income rose 4.7% year-on-year in real terms to JPY557,663, or around USD3,546.80.

In China, the Shanghai Composite was down 0.4%, while the Hang Seng index in Hong Kong edged up 0.1%.

Meanwhile, Trump said he was prepared to discuss US arms sales to Taiwan during his visit to Beijing this week, suggesting his relationship with Chinese President Xi Jinping could help avoid conflict over the island. Asked whether Washington should continue selling weapons to Taiwan, Trump said: "I'm going to have that discussion with President Xi."

The S&P/ASX 200 in Sydney was down 0.4%.

Australian business confidence improved slightly in April, according to a survey from National Australia Bank. The NAB business confidence index rose five points to minus 24 from minus 29 in March, helped by partial recoveries in retail, construction and recreation services. However, the business conditions index fell three points to plus three, marking a fourth consecutive monthly decline.

Gold was quoted at USD4,714.71 an ounce early Tuesday, lower than USD4,733.27 on Monday.

Back in the UK, retail sales declined in April, though comparisons were distorted by differences in Easter timing. According to the British Retail Consortium-KPMG monitor, total retail sales fell 3% year-on-year in April 2026 after rising 7% in April 2025.

Food sales dropped 2.5% against growth of 8.2% a year earlier, while non-food sales fell 3.3% following 6.1% growth in 2025. In-store non-food sales were down 4.0%, while online non-food sales fell 2.3%, reversing a 7% increase a year before. Only Jewellery & Watches and Health & Beauty recorded spending growth.

In Tuesday's corporate calendar, among others, Bytes Technology reports full-year results, Greggs and International Workplace issue trading statements, Imperial Brands posts half-year results, while On the Beach and Vodafone Group also update the market.

Further, FTSE 100 constituent IMI, an engineering firm based in Birmingham, will release a trading update as it is holding its annual general meeting.

In the economic calendar on Tuesday, the eurozone and Germany release ZEW economic sentiment surveys, while Germany also publishes CPI data and Switzerland reports producer and import prices.

In the US, consumer price inflation, the Redbook index and the monthly budget statement are due.

By Eva Castanedo, Alliance News reporter

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