FTSE Stocks Advance as Trump Emphasises Diplomacy in Iran Conflict
The FTSE 100 extended its positive momentum on Tuesday, buoyed by indications that US President Donald Trump is prioritising diplomatic channels over further military escalation in the ongoing war with Iran. The blue-chip index closed up 48.49 points, or 0.5%, at 10,176.45, while the FTSE 250 surged 249.21 points, or 1.2%, to 21,203.71. The AIM All-Share index also advanced, gaining 7.00 points, or 1.0%, to reach 717.12.
Trump's Strategic Pivot Eases Market Tensions
According to reports from The Wall Street Journal, administration officials revealed that President Trump and his aides have concluded a mission to reopen the Strait of Hormuz—a critical waterway through which a fifth of global oil flows—would prolong the conflict beyond his preferred four to six-week timeline. Consequently, the focus has shifted to targeting Iran's missiles and naval capabilities before applying diplomatic pressure to secure the strait's reopening.
However, Trump has concurrently threatened strikes on Iran's energy infrastructure if a deal is not reached. This mixed messaging has created uncertainty, with David Morrison, senior market analyst at Trade Nation, noting traders are being "buffeted by conflicting statements" regarding the US-Israeli war with Iran.
Oil Prices and Inflation Dynamics
Amid the geopolitical flux, oil prices retreated from recent peaks. Brent crude traded lower at $107.38 per barrel on Tuesday afternoon, down from $112.46 late Monday. Meanwhile, Eurozone inflation surged to 2.5% in March, its highest level since January 2025, driven by escalating energy prices linked to the Iran war. Core inflation, excluding volatile components like energy and food, eased slightly to 2.3%.
The European Commission has urged member states to coordinate preparations to secure oil supplies. Analysts at Citi suggested that energy price increases have been partially "tamed" by indirect tax cuts in countries such as Italy and Spain, anticipating more governmental fiscal interventions to cushion the impact.
Unilever's Sharp Decline Amid Major Restructuring
In a significant corporate development, Unilever shares plummeted 7.3% after confirming an agreement to combine its Foods business with McCormick & Co. This merger, valued at $44.8 billion, will create a "global flavour powerhouse" with approximately $20 billion in revenue, accelerating Unilever's transformation into a pureplay home and personal care company.
Under the terms, Unilever and its shareholders will receive shares equivalent to 65% of the combined entity, alongside $15.7 billion in cash. Post-completion, Unilever's pro-forma annual revenue is projected around €39 billion, centred on beauty, wellbeing, personal care, and home care segments.
Analysts at RBC Capital Markets expressed scepticism, questioning the rationale behind disposing of a wholly-owned business for minimal control premium and leaving shareholders with a 55% stake in a sprawling food operation.
Broader Market Movements and Key Performers
European equities mirrored the positive trend, with Paris's Cac 40 up 0.6% and Frankfurt's Dax 40 rising 0.5%. In New York, the Dow Jones Industrial Average gained 1.1%, the S&P 500 increased 1.4%, and the Nasdaq Composite advanced 1.9%.
Miners bolstered the FTSE 100 as precious metal prices climbed. Gold traded at $4,613.15 per ounce, up from $4,541.34. Notable gainers included Antofagasta, Fresnillo, Endeavour Mining, and Anglo American, with rises of 5.3%, 4.1%, 4.2%, and 2.8%, respectively.
On the FTSE 250, Raspberry Pi soared 47% following well-received full-year results, while Ashmore increased 6.7% after announcing a strategic partnership with Japan Post Insurance. Conversely, Future plunged 24% due to adverse impacts from Google search algorithm changes on advertising and e-commerce revenue.
Currency and Treasury Yield Fluctuations
The pound strengthened to $1.3205 from $1.3191, though it weakened against the euro to €1.1463 from €1.1518. The euro appreciated to $1.1523 from $1.1452, while the dollar dipped against the yen to 159.02 from 159.53.
In bond markets, the yield on the US 10-year Treasury edged down to 4.33% from 4.34%, whereas the 30-year Treasury yield inched up to 4.91% from 4.90%.
Top FTSE 100 risers: Antofagasta, Endeavour Mining, Fresnillo, Metlen Energy & Metals, JD Sports Fashion.
Top FTSE 100 fallers: Unilever, IMI, Croda, Diageo, Coca-Cola Europacific Partners.
