The FTSE 100 extended its gains on Tuesday amid reports that US President Donald Trump is prioritising diplomatic efforts over further military escalation in the conflict with Iran. The blue-chip index closed up 48.49 points, or 0.5 per cent, at 10,176.45, while the FTSE 250 added 249.21 points, or 1.2 per cent, to 21,203.71.
According to the Wall Street Journal, US administration officials indicated that Mr Trump and his aides had concluded that a mission to reopen the Strait of Hormuz would prolong the conflict beyond his four-to-six-week timeline. Instead, the president has decided to focus on striking Iran's missiles and navy before pursuing diplomatic pressure to reopen the waterway, through which about a fifth of the world's oil is normally transported. However, he has threatened to hit Iran's energy infrastructure if no deal is reached.
Oil prices eased from recent highs, with Brent crude trading at $107.38 a barrel on Tuesday afternoon, down from $112.46 late Monday. David Morrison, senior market analyst at Trade Nation, said traders continue to be "buffeted by conflicting statements" from Mr Trump regarding the next steps in the US-Israeli war with Iran.
In London, Unilever shares fell 7.3 per cent after it confirmed plans to combine its Foods business with US rival McCormick & Co in a deal valuing the division at $44.8 billion. Under the terms, Unilever will receive shares equivalent to 65 per cent of the combined company plus $15.7 billion in cash, leaving it as a pureplay home and personal care firm with annual revenue of around €39 billion. Analysts at RBC Capital Markets said they were "unimpressed", questioning why Unilever would dispose of a business it fully owned for a minimal control premium.
Miners supported the FTSE 100 as gold, silver and copper prices rose. Gold traded at $4,613.15 an ounce, up from $4,541.34. Meanwhile, eurozone inflation surged to 2.5 per cent in March, its highest since January 2025, driven by rising energy costs linked to the Iran war.
