(Sharecast News) - London stocks were still a little lower by midday on Tuesday after Iran and Israel said they would end their mutual attacks, and as US President Donald said he was in the "final throes" of reaching a peace deal.
The FTSE 100 was down 0.3% at 10,347.57, while Brent crude was 1.8% lower at $92.55 a barrel and West Texas Intermediate was off 2.2% at $89.26.
Speaking to reporters on his return from an NBA Finals game, Trump said: "We're in the final throes of what will be a very, very good deal". Asked whether it would be matter of days or weeks, the US president said it would take "two or three days". Trump also said the strait of Hormuz would "open up right away" once the deal is signed.
Neil Wilson, UK investor strategist at Saxo Markets, said: "We've had this line strung out to us for weeks now so as ever it's taken with a large dose of salt. Nevertheless, oil prices dipped, first after Israel and Iran appeared to stop shooting at each and then as Trump said talks were ongoing and close to an end. Brent was down about -1% to $93 while gold tracked sideways after the drop below its 200-day triggered some technical selling."
Wilson said the FTSE 100 "continues to track within its 10,300-400 range without much drama".
On home shores, the Confederation of British Industry trimmed its UK growth forecasts while sharply revising inflation expectations upwards, on the back of the ongoing war in the Middle East.
Publishing its latest Economic Forecast, the employers' organisation expects GDP to grow by 1.1% in 2026 and 0.9% in 2027. In December, it predicted GDP growth of 1.3% for this year and 1.5% for the next.
Inflation, meanwhile, was forecast to once again mount, rising towards 4% by the end of the year. Prior to the outbreak of the US-Iran war, the CBI had expected inflation to continue falling, reaching 2.6% in 2026 and 2.3% in 2027. Currently standing at 2.8%, the Bank of England's long-term consumer price index target is 2%.
The CBI attributed its more muted outlook to geopolitical tensions in the Middle East and the subsequent spike in energy costs, which it said would weigh on households and businesses throughout 2027.
At the start of December, the CBI forecast two reductions to Bank Rate, one by the end of 2025 and another in early 2026. The central bank reduced the cost of borrowing to 3.75% in December, but since the outbreak of war has left interest rates on hold and some analysts are pricing in at least one rise this year.
The CBI now expects rates to remain on hold through 2027.
Louise Hellem, the CBI's chief economist, said: "What's happening around the world is compounding the UK's low growth story. We saw weak momentum throughout 2025, but if it weren't for the latest global shocks, we could be having a much more positive conversation about the economy today.
"Last year it was tariffs and this year it's the conflict in the Middle East. A world of elevated uncertainty and volatility is no longer the exception, it's the norm - the backdrop against which businesses must operate."
In equity markets, GSK slumped as it agreed to buy Boston-based oncology-focused biopharmaceutical firm Nuvalent for $10.6 bn (7.9bn).
Russ Mould, investment director at AJ Bell, said: "The initial share price response indicates some trepidation among investors which is understandable given the size of the takeover.
"GSK is paying a hefty premium to get the deal over the line and the two big lung cancer products flagged by Miels in heralding the takeover still await regulatory approval. Any acquisition of this size will always face challenges around integration."
Oxford Instruments was also in the red after full-year results.
On the upside, Bunzl jumped after an upgrade to 'outperform' at BNP Paribas.
WPP was the top gainer on the FTSE 250 after an initiation at 'buy' by Berenberg, while geotechnical contractor Keller gained after it was awarded a contract variation order in relation to the reconstruction of the I-40 highway in the US.
Housebuilder Bellway ticked up as it held guidance but said customer demand had moderated in recent weeks after a positive start to the spring selling season. "The outlook beyond the current financial year remains uncertain, reflecting ongoing geopolitical tensions in the Middle East and a less predictable domestic political environment," the company said in a trading update.
Bellway still expects annual underlying operating profit within a range of 320m to 330m.
Market Movers
FTSE 100 (UKX) 10,347.57 -0.25%
FTSE 250 (MCX) 23,112.29 0.43%
techMARK (TASX) 5,937.44 -0.98%
FTSE 100 - Risers
Metlen Energy & Metals (MTLN) 41.49p 3.91%
Croda International (CRDA) 2,943.00p 2.86%
Bunzl (BNZL) 2,562.00p 2.73%
IG Group Holdings (IGG) 1,885.00p 2.72%
Admiral Group (ADM) 3,368.00p 1.81%
Airtel Africa (AAF) 349.40p 1.69%
Barratt Redrow (BTRW) 256.10p 1.43%
Diageo (DGE) 1,517.50p 1.30%
NATWEST GROUP (NWG) 606.60p 1.30%
BAE Systems (BA.) 1,961.00p 1.26%
FTSE 100 - Fallers
GSK (GSK) 1,863.50p -2.51%
Standard Chartered (STAN) 1,888.50p -2.30%
HSBC Holdings (HSBA) 1,349.00p -1.71%
AstraZeneca (AZN) 13,570.00p -1.64%
The Sage Group (SGE) 849.00p -1.55%
Mondi (MNDI) 736.20p -1.31%
Glencore (GLEN) 585.80p -1.11%
Prudential (PRU) 946.60p -1.00%
BP (BP.) 541.40p -0.82%
Fresnillo (FRES) 3,000.00p -0.73%
FTSE 250 - Risers
WPP (WPP) 277.10p 5.68%
Keller Group (KLR) 2,556.00p 3.49%
Genuit Group (GEN) 262.00p 3.23%
Marshalls (MSLH) 133.40p 2.62%
Breedon Group (BREE) 282.40p 2.54%
Aston Martin Lagonda Global Holdings (AML) 42.12p 2.23%
Schroder Oriental Income Fund Ltd. (SOI) 439.50p 2.21%
Great Portland Estates (GPE) 306.80p 2.20%
Derwent London (DLN) 1,799.00p 2.10%
Abrdn (ABDN) 241.20p 2.03%
FTSE 250 - Fallers
Oxford Instruments (OXIG) 2,872.00p -6.93%
Raspberry PI Holdings (RPI) 996.50p -3.75%
Genus (GNS) 2,164.00p -3.22%
Hays (HAS) 35.44p -2.85%
Ithaca Energy (ITH) 248.90p -2.70%
Oxford Nanopore Technologies (ONT) 128.20p -2.06%
Computacenter (CCC) 4,272.00p -2.02%
Ocado Group (OCDO) 201.20p -1.85%
Pagegroup (PAGE) 121.90p -1.85%
RTW Biotech Opportunities Ltd (RTW) 2.12p -1.85%
34.49 (0.33%)
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