London close: Stocks rise despite oil price rally as banks gain

(Sharecast News) - London's FTSE 100 pushed higher for the second day on Tuesday, along with European and US markets, despite another rise in oil prices, with gains in the heavyweight banking sector providing a lift.

The Footsie finished 0.8% higher at 10,403.60, settling above the 10,400 mark for the first time in a week.

Axel Rudolph, senior technical analyst at IG, attributed the gains to falling bond yields the yield on a 10-year US Treasury was down 2.4 basis points at 4.20% - its second straight decline after hitting a two-month high last Friday.

"Despite the oil price hovering around the $100 mark and US gasoline futures hitting their highest level since July 2022, stock indices extended Monday's gains while yields fell for a second straight day. Investors, alongside several major US bank analysts, seem to be growing more confident that the Iran war will soon end and that the energy shock won't lead to stagflation," Rudolph said.

Brent was 1.7% higher at $101.93 a barrel by the close as investors reacted to Iran's attacks on oil and gas facilities and ongoing trade disruptions along the key Strait of Hormuz.

The United Arab Emirates said a drone struck the large Shah natural gas field on Monday and set it on fire, with operations still suspended, while a damage assessment was carried out. An oilfield in Iraq, Majnoon, and the UAE's biggest port and oil storage facility, Fujairah, were also hit by Iranian drones and missiles.

In other news, there was a less than enthusiastic global response to US President Donald Trump's demands for allied assistance to protect shipments through the Strait of Hormuz. European countries on Monday ruled out sending warships to the vital strait, through which 20% of the world's oil is shipped, despite threats from Trump that the Nato alliance of nations faced "a very bad future" if members fail to provide assistance.

Meanwhile Iran and Iraq were reportedly holding talks about allowing transit of Iraq's oil tankers through Hormuz, Iraq's oil minister Hayan Abdul-Ghani was quoted as saying by the country's state-run news agency.

Banks, BT Group in the black

Banks were among the gainers, with heavyweights Standard Chartered, HSBC, Lloyds, Barclays and NatWest all trading higher.

BT Group rose after Ofcom said the door was open to the gradual deregulation of Openreach, but only if competition takes root.

On the FTSE 250, Raspberry Pi rocketed higher after Hedgeye Risk Asset Management recommended buying shares of the maker of high-performance, low-cost single-board computers.

Trustpilot also surged as the customer feedback platform reported full-year profits ahead of expectations as both bookings and revenues grew and margins expanded. Trustpilot said operating profits had skyrocketed 320% to $16m in FY25.

Builders merchant Travis Perkins rose even as it warned of subdued market conditions and said it swung to an annual loss, while sector peer Wickes gained as it reported a jump in annual profits and announced a �10m share buyback.

On the downside, Close Brothers was under pressure again as it reported a narrowing of its first-half losses and said it was planning to cut around 600 jobs by the end of financial 2027 as it accelerates its cost-cutting programme. Shares in the company tumbled late on Monday after Viceroy Research said in a note that it had "systematically misrepresented" its exposure to the car finance scandal.