Stocks jump as US-Iran pause sees oil price fall

The FTSE 100 closed higher in London on Monday as investors welcomed a temporary pause in hostilities between the US and Iran, which helped drive the oil price sharply lower.The FTSE 100 index closed up 45.52 points, 0.4%, at 10,781.75. The FTSE 250 ended up 96.61 points, 0.4%, at 23,898.10, while the AIM All-Share closed down 1.29 points, 0.2%, at 771.69.In the Middle East, the US held fire at the weekend after 13 days of attacks on sites in Iran, and Donald Trump’s UN envoy said the US president was “giving talks some space”.Tehran said in turn it would stop its retaliatory attacks on regional neighbours, handing Gulf shipping and the oil industry a respite.David Morrison at Trade Nation said it is “unclear” if this is a precursor to a resumption of peace talks, or a tactical move militarily.Nonetheless, the news saw the price of oil head back below 90 US dollars a barrel. Brent oil for September delivery traded lower at 89.71 dollars a barrel on Monday afternoon, from 95.49 dollars late Friday.Kathleen Brooks, research director at XTB, cautioned: “Although the situation in the Middle East has calmed, it has not been resolved, and it could make a decline below 85 dollars per barrel tricky at this stage.”The oil price falls saw BP drop 2.6% and Shell fall 0.9% in London, while on the FTSE 250 Harbour Energy and Ithaca Energy declined 5.7% and 7.8%.Vodafone led the FTSE 100 gainers, up 4.8%, as it raised its full-year earnings guidance.The telecommunications firm expects an annual adjusted Ebitda after leases between 13 billion euros and 13.3 billion euros, lifted from 11.9 billion euros and 12.2 billion euros before.On an organic basis, service revenue climbed 5.2% with growth in all segments. Deutsche Bank said this came in higher than consensus expectations in all markets except Turkey.Read MoreAstraZeneca rose 1.7% as it reported second quarter revenue in line with consensus, but earnings above forecast.A lower-than-projected tax charge and improved margins offset higher costs than forecast at the Cambridge-based drugs maker.The earnings kick off a busy week of results in the UK and US. In London, UK lenders Lloyds, Barclays and NatWest are among well-known names reporting, while on Wall Street, technology firms Meta Platforms, Microsoft, Apple and Amazon headline the corporate calendar.In European equities on Friday, the CAC 40 in Paris closed up 0.4%, while the DAX 40 in Frankfurt ended 1.0% higher.Stocks in New York were mixed. The Dow Jones Industrial Average was up 0.4%, the S&P 500 index was 0.2% lower, and the Nasdaq Composite declined 0.6%.The week also sees interest rate calls in the UK, US and Japan. All three central banks are expected to leave interest rates on hold.In the UK, RBC Capital Markets looks for a 7-2 vote in favour of leaving the bank rate at 3.75%, with two dissenting votes for a 25 basis points hike. Goldman Sachs also sees a 7-2 vote for the status quo, though sees risks of further dissents.“The guidance will likely reiterate that the (Monetary Policy Committee) stands ready to act as necessary to return inflation to target, while refraining from giving a strong steer on the upcoming meetings,” Goldman analysts say.The pound was lower at 1.3305 dollars on Monday afternoon from 1.3342 dollars at the equities close on Friday. Against the euro, sterling was lower at 1.1698 euros from 1.1717 euros.The euro stood lower at 1.1376 dollars from 1.1385 dollars. Against the yen, the dollar was trading down slightly at 163.67 yen compared to 163.70 yen.The yield on the US 10-year Treasury narrowed to 4.65% on Monday from 4.66% on Friday. The yield on the US 30-year Treasury fell to 5.13% from 5.14%.Gold was little changed at 4,077.10 dollars an ounce on Monday from 4,078.09 dollars on Friday.Back in London, M&A activity continued apace.DCC Energy rose 0.9% as it agreed to a £5.75 billion takeover.The Dublin-based provider of sales, marketing and distribution services to the energy sector is being acquired by a consortium comprised of funds advised by Kohlberg, Kravis, Roberts and Energy Capital Partners Management.Pinewood motored 33% higher as the software provider for automotive sellers said Friday it would be “minded to recommend” a possible offer by Ridgeview Partners.The offer is priced at £4.48 per share in cash, valuing Pinewood’s entire issued and to be issued ordinary share capital at £545 million.Pharos Energy has agreed to an all-cash takeover offer from Serica Energy that values Pharos at £145.7 million, the two London-listed companies announced on Sunday evening. Pharos added 27%, while Serica lost 7.3%.Elsewhere, on the FTSE 250, Vesuvius plunged 13% as it forecast 2026 trading profit below current market expectations.The London-based molten metal flow engineering and technology company said that since its May trading update, it has continued to be hurt by “operational issues” in its steel division. Additionally, Advanced Refractories is experiencing a “challenging” trading environment, particularly in Europe.Vesuvius now expects full-year trading profit to be slightly ahead of £151.1 million in 2025, on a constant currency basis, below the £169 million market consensus, cited by JPMorgan.The biggest risers on the FTSE 100 were Vodafone, up 5.5p at 120.1p; Relx, up 114p at 2,682p; Autotrader, up 21.7p at 510.8p; Airtel Africa, up 14.2p at 348.4p; and JD Sports, up 3.7p at 92.7p.The biggest fallers on the FTSE 100 were Glencore, down 18.2p at 519.1p; BP, down 14.1p at 534.3p; Polar Capital Technology Trust, down 16p at 629.5p; IMI, down 70p at 2,980p; and Antofagasta, down 80p at 3,551p.Tuesday’s economic calendar sees a Conference Board consumer confidence reading and the start of the Federal Open Market Committee meeting.Tuesday’s UK corporate calendar has half-year results from lender Barclays, pharmaceuticals firm GSK and consumer goods firm Unilever.Contributed by Alliance News.