London pre-open: Stocks seen steady as Mideast conflict remains in focus

(Sharecast News) - London stocks were set for a flat open on Tuesday after Iran and Isreal said they would end their mutual attacks, and after US President Donald said he was in the "final throes" of reaching a peace deal.

The FTSE 100 was called to open steady at around 10,373.

Ipek Ozkardeskaya, senior analyst at Swissquote, said: "Yesterday's occasion was the news that Iran and Israel would stop bombing each other after a bomb-filled weekend. The latter pulled crude prices lower, along with yields. US crude consolidates near $90 per barrel this morning on hopes that the latest ceasefire will hold. I can't stop myself from thinking that it won't.

"So, to me, risks remain two-sided. We could see a further pullback in the short run, but in the medium run, believing in an easy peace looks like wishful thinking."

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".

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 corporate news, housebuilder Bellway 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.

GSK said it has agreed to buy Boston-based oncology-focused biopharmaceutical firm Nuvalent for $10.6bn (�7.9bn).

GSK said the deal is consistent with its strategy of acquiring assets that have "validated targets and meaningfully address efficacy and/or tolerability limitations of existing standard-of-care therapies". It includes three products in lung cancer in a single transaction.

Geotechnical contractor Keller said it has been awarded a contract variation order in relation to the reconstruction of the I-40 highway in the US.

Keller, which started working on the I-40 project in 2025, said the latest agreement followed a series of work packages that it was already undertaking. To date, Keller has secured roughly $380m of work in relation to the I-40 reconstruction, including the $207m contract variation, of which approximately $70m has been completed.