London pre-open: Stocks to surge, oil slumps on US-Iran peace deal

(Sharecast News) - London stocks were set to surge at the open on Monday as investors cheered an agreed peace deal between the US and Iran.

The FTSE 100 was called to open around 90 points higher. At 0715 BST, Brent crude was down 4% at $83.87 a barrel and West Texas Intermediate was of 4.5% at $81.08 after the US and Iran agreed to end all fighting and reopen the Strait of Hormuz.

The long-sought peace deal was first announced by Pakistan's prime minister Shehbaz Sharif, with Donald Trump shortly afterwards confirming the Strait of Hormuz would reopen.

Precise terms are unknown, though Sharif confirmed it included the "immediate and permanent termination" of all military operations, including in Lebanon.

Ipek Ozkardeskaya, senior analyst at Swissquote, said: "Of course, some remain sceptical regarding the upcoming peace deal as: 1) Trump couldn't help but tell the New York Times on Sunday that if an agreement isn't reached on the nuclear deal, the attacks would continue; and 2) Israel has gone totally out of control.

"But as long as oil prices remain in check, markets' geopolitical concerns will ease. That's great news heading into a week full of major central bank meetings."

Policy announcements are due this week from the Bank of Japan, the Reserve Bank of Australia, the Federal Reserve, the Swiss National Bank and the Bank of England.

In corporate news, Frasers Group said it had launched a bid to buy Australia's Accent Group for �166m.

The company, which already owns a 23% stake in the retailer, is offering 65 Australian cents a share.

Shares in Accent surged to a high of 75cents after the bid was tabled and the board advised shareholders not to take action on the offer, noting that the price was equal to Accent's closing price on June 12, with the deal offering no premium.

Big Yellow said it has sold its industrial estate in Harrow, London for �38.4m, subject to a �2m retention from the sale price, which will be released on the satisfaction of certain conditions.

Proceeds from the sale will be used to fund the build out of 11 new stores and one replacement store in the development pipeline on land owned by the group.

On a proforma basis, the 12 pipeline stores are expected to generate �35m net operating income. This represents an income return of 16.5% on the �212m total cost to complete.

"The board believes that currently there is no other use for the capital that comes close to delivering this level of long term returns," it said.

Drugmaker AstraZeneca said that its cancer drug Truqap, used together with abiraterone and prednisone, has been approved in the US as the first targeted treatment for a specific form of advanced prostate cancer driven by a fault in the PTEN gene.

AstraZeneca's approval from the US Food and Drug Administration was based on strong results from its Phase III CAPItello281 trial, which were presented at last year's ESMO cancer conference and published in Annals of Oncology.