London pre-open: Stocks to gain, oil prices fall amid US-Iran peace hopes

(Sharecast News) - London stocks were set to rise at the open on Wednesday, while oil prices fell amid renewed hopes of a potential peace deal between the US and Iran. The FTSE 100 was called to open around 100 points higher and Brent crude was down 1.7% at $108.00 a barrel at 0720 BST after Donald Trump said he was pausing 'Project Freedom' to open the Strait of Hormuz as "great progress" was being made towards a "complete and final agreement with the representatives of Iran".

The US president said on Truth Social that the operation would be paused for "a short period" to see whether or not the agreement can be finalised and signed.

Rabobank said: "Trump's announcement on Operation Freedom coincides with Iranian Foreign Minister Araghchi today travelling to Beijing to meet with counterpart Wang Yi. This comes ahead of Trump's planned trip to China next week to meet with President Xi, where discussions over the Iran war and reopening the Strait of Hormuz are sure to be at the top of the agenda.

"Might we expect some kind of grand bargain whereby China takes more assertive action to rein in its Iranian allies, aided perhaps by Vladimir Putin's willingness to provide enrichment services for civilian purposes on Iran's behalf and to take custody of Iran's existing stocks of near-weapons-grade uranium? Might this also involve a Ukraine war component foreshadowed by recent unilateral ceasefire announcements from both Moscow and Kiev, at the prompting of the US?"

In corporate news, retailer Next lifted full-year guidance after first-quarter sales beat forecasts, boosted by unusually warm weather.

Full-price sales jumped 6.2% in the 13 weeks to 2 May - comfortably ahead of internal expectations for a 4% uplift - and adding an extra £8m to profits. As a result, the high street bellwether left guidance for full-year sales unchanged but raised its outlook for pre-tax profits to £1.218bn from £1.210bn.

It also raised forecasts for costs associated with the conflict in the Middle East, but said price rises in international markets would mitigate most of the impact.

Online rail ticket platform Trainline said the Iran war was weighing on foreign ticket purchases as it flagged flat sales for 2027.

The company said it expected £6.2bn to £6.45bn in sales, compared with £6.3bn in fiscal 2025/26 - a rise of 7%. Trainline also expects headwinds in the UK from fare freezes and train companies promoting their own ticket channels.

Medical equipment manufacturer Smith & Nephew said its first-quarter trading performance was in line with expectations, with underlying revenues up 3.1% year-on-year at $1.5bn on the back of growth across all business units and regions.

Smith & Nephew, which also launched a new $500m share buyback, maintained its full-year guidance for underlying revenue growth of around 6% and approximately 8% trading profit growth.