London pre-open: Stocks to nudge up amid Hormuz reopening hopes

(Sharecast News) - London stocks were set to nudge higher at the open on Thursday amid hopes of a US-Iran deal to reopen the Strait of Hormuz.

The FTSE 100 was called to open around six points higher. At 0728 BST, Brent crude was up 0.3% at $79.72 a barrel and West Texas Intermediate was 0.1% firmer at $75.28.

Sentiment was set to be lifted after Iran said that talks with Oman were progressing and that an agreement had been reached on a shipping route, although safe passage and a broader deal remain uncertain.

Stephen Innes at SPI Asset Management said: "Iran says it has agreed with Oman on the geographical coordinates of a temporary shipping route through the waterway, with a joint statement now reportedly in its final stages. Donald Trump has also suggested that a deal could be reached within days.

"For oil, this is the clearest de-escalation signal since the conflict began. If tankers start moving again, part of the remaining disruption premium should continue to come out of crude. Gulf exports can recover, freight costs should ease and insurers can begin reassessing the extraordinary war-risk charges built into the market.

"But the most important detail is the clock attached to the agreement.

"The proposed arrangement would last for only two to four months.

"During that provisional phase, Iran would reportedly send its own vessels, including oil tankers, through the route to confirm that it is clear of mines before commercial traffic resumes more broadly. Ships would not be charged transit fees during the trial period.

"That no-fee window is clearly bearish for oil. It removes another obstacle to restarting Gulf exports and gives tanker owners a reason to test the route without immediately paying an Iranian toll.

"The question is what happens when the trial period ends."

In UK corporate news, insurer Admiral posted a sharp drop in firsthalf profits, with both pre-tax earnings and earnings per share dropping 18% year-on-year, reflecting lower earned premiums in UK Motor after last year's rate cuts and higher quotashare reinsurance charges.

Admiral said pretax earnings from continuing operations fell to �429.2m, while EPS dropped to 109p and return on equity declined to 45% from 57%. Turnover was broadly flat at �3.11bn, as an 11% rise in other personal lines was offset by a 5% fall in UK Motor turnover due to lower average premiums. Group risks increased 5% to 12m, driven by continued expansion outside motor.

Wizz Air reported a big decline in firstquarter profits as a 39% surge in fuel costs due to the Iran war offset strong passenger and capacity growth.

Revenue rose 5.5% to �1.51bn as the airline carried 21.2m passengers, up 25% year on year, but operating performance weakened as cost pressures intensified. EBITDA fell to �147.4m from �300.2m a year earlier, while the group posted a �198m net loss compared with a �38m profit in the prior period.

Results from WPP, PZ Cussons, Hikma, Persimmon, TP Icap and Pagegroup were also in focus, among others.