LONDON MARKET MIDDAY: US and Iran reportedly closer to peace deal

Wed, 06th May 2026 12:01

(Alliance News) - Stock prices in London were firmly in the green at midday on Wednesday, as the US and Iran reportedly draw closer to a permanent ceasefire deal.

Also, S&P Global reported that the UK services sector, and the wider private sector, saw "moderate" expansions in activity last month.

The FTSE 100 index was up 228.35 points, 2.2%, at 10,447.46. The FTSE 250 was up 502.93 points, 2.2%, at 22,946.74, and the AIM all-share was up 10.02 points, 1.3%, at 809.30.

The Cboe UK 100 was up 2.3% at 1,040.89, the Cboe UK 250 was up 2.6% at 19,982.60, and the Cboe small companies was up 0.2% at 18,337.70.

The US believes it's getting close to an agreement with Iran on a memorandum of understanding to end the Middle East war and set a framework for more detailed nuclear negotiations, Axios reported.

The one-page, 14-point MoU is being negotiated between US President Donald Trump's envoys Steve Witkoff and Jared Kushner and several Iranian officials, both directly and through mediators, the report said.

Nothing has been agreed yet, but Axios sources said this was the closest the parties had been to an agreement since the war began.

In its current form, the MoU would declare an end to the war and the start of a 30-day period of negotiations on a detailed agreement to open the Strait of Hormuz, limit Iran's nuclear program and lift US sanctions, Axios said. The deal would also see both sides lifting restrictions on transit through Hormuz.

On the FTSE 100, defence firm Rolls-Royce rose 8.7%.

Brent oil was quoted lower at USD100.62 a barrel at midday in London on Wednesday from USD110.70 late Tuesday. BP was the FTSE 100's biggest lagger, down 3.7%, closely followed by a 3.5% decline from Shell. AIM-listed Serica Energy also tracked oil prices lower, falling 7.7%.

On the FTSE 250, the worst performers included Ithaca Energy, down 6.8%, Harbour Energy, down 5.0%, and Hunting, down 3.7%.

But airline stocks rose, with International Consolidated Airlines climbing 6.2%. easyJet was the FTSE 250's third-best performer, up 7.8%, closely followed by Wizz Air which rose 7.5%. Also, Intercontinental Hotels rose 3.1%, and WH Smith, whose retail stores are concentrated in travel hubs including airports, led the index with an 11% jump.

Gold was quoted higher at USD4,708.67 an ounce against USD4,576.51. Gold miners continued to perform well: Fresnillo led the FTSE 100, rising 9.2%, while Antofagasta rose 8.4% and Anglo American 8.0%. On the FTSE 250, Hochschild rose 7.3% while Pan African gained 7.5%.

Trainline lost 3.0%.

The London-based rail and coach travel ticketing platform said pretax profit in the financial year that ended February 28 shot up 41% on-year to GBP114.3 million.

"At the same time, we expect previously-flagged headwinds to weigh on near-term growth," Trainline cautioned. These included the effects of the Middle East conflict on foreign travel sales, and the UK government freezing fares until March 2027.

JD Wetherspoon rose 0.9%, after it reported higher quarterly sales but cautioned that higher costs may lead to slightly lower-than-expected profit.

The pub chain's like-for-like sales increased by 3.4% in the 13 weeks to April 26, compared to the same period last year. Total sales increased by 4.1%.

However, Chair Tim Martin cautioned that "substantial increases in costs", may result in profits "slightly below market expectations".

On AIM, EnergyPathways surged up 23%.

The West Sussex, England-based energy infrastructure company said it is to be awarded a gas storage licence by the North Sea Transition Authority related to the MESH project.

"This decision marks a major milestone for the company's plans to develop the wider MESH Project located in the East Irish Sea and onshore in Barrow-in-Furness," EnergyPathways said.

Meanwhile, in the UK, the headline seasonally adjusted services PMI business activity index rose to 52.7 points in April from 50.5 in March, slightly beating the flash estimate of 52.0 and signalling "a moderate expansion of service sector output".

The seasonally adjusted PMI composite output index, meanwhile, increased to 52.6 points in April from 50.3 in March, showing a "moderate upturn" across the manufacturing and service sectors.

"April data signalled a modest recovery in UK service sector output growth after the considerable loss of momentum seen in March," commented S&P Global Market Intelligence Economics Director Tim Moore on Wednesday. "However, this improvement could easily prove short-lived...Survey respondents widely noted that the Middle East conflict and subsequent global supply chain disruptions had weighed heavily on business and consumer confidence."

UK Work & Pensions Secretary Pat McFadden, meanwhile, has warned that the impact of the continued closure of the Strait of Hormuz, an important oil shipping route, could feed through to the labour market.

McFadden told Sky News: "The latest unemployment figures for February showed a fall, interest rates were expected to come down...The truth is, with the effect of the Iran war, we can't count on any of that at the moment. There is likely to be an effect on prices, which feeds through from energy costs, and there may well be labour market implications."

Asked if this meant job losses, McFadden replied: "Yes. It could happen."

Also, a review into the UK claims management market is being launched by the City regulator following concerns that some consumers are being failed.

The review will look at the root causes of poor practices across the market, such as aggressive marketing, misleading adverts and unfair exit fees, the Financial Conduct Authority said. Other concerns include consumers being signed up without their consent or ending up with multiple firms representing them, potentially causing confusion and delaying compensation.

In European equities on Wednesday, the CAC 40 in Paris was up 2.8%, while the DAX 40 in Frankfurt was up 2.6%.

Eurozone's producer price index inflation was sharper than anticipated in March, the first full month since the war between the US, Israel, and Iran, which sent energy prices up, data published by Eurostat showed.

Industrial producer prices shot up 2.1% on-year in March in the eurozone, compared to a fall of 3.0% in February. It was higher than the FXStreet-cited consensus of a 1.8% rise.

Energy prices in the eurozone were 4.2% higher year-on-year in March after an 11.7% fall in February. In the EU, energy prices rose 4.4% in March following a 10.5% fall in February.

Monthly, producer prices in the eurozone surged 3.4% in March after a 0.6% fall in February, which was revised up from a 0.7% contraction. It was mildly above the consensus of a 3.3% increase.

Energy prices in the eurozone jumped 11.1% on-month in March after a 2.5% decline in February. Across the EU, energy prices were up 10.2% in March following a 1.8% fall in February.

The pound was quoted at USD1.3619 midday on Wednesday, higher compared to USD1.3569 on Tuesday. Against the euro, sterling softened to EUR1.1563 from EUR1.1586 a day prior. The euro stood higher at USD1.1773, against USD1.1707. Against the yen, the dollar was trading lower at JPY155.93 compared to JPY157.66.

Stocks in New York were called higher. The Dow Jones Industrial Average was called up 1.0%, the S&P 500 index up 0.8%, and the Nasdaq Composite up 1.4%.

The yield on the US 10-year Treasury was quoted at 4.34%, narrowing from 4.42%. The yield on the US 30-year Treasury was quoted at 4.93%, narrowing from 5.00%.

Still to come on Wednesday's economic calendar, the US has ADP unemployment figures, and Canada has Ivey purchasing managers' index data.

By Emma Curzon, Alliance News reporter

Comments and questions to newsroom@alliancenews.com

Commodities Forex Market News