London midday: FTSE turns higher as Trump hints at 'resolution' to Iran conflict

(Sharecast News) - London stocks had turned higher by midday on Monday, reversing earlier heavy losses, while oil prices slumped, as US President Donald Trump suggested a resolution to the conflict with Iran could be on the cards, just two days after threatening the company's energy infrastructure. The FTSE 100 was 0.4% firmer at 9,959.58, having entered correction territory earlier in the session as it fell more than 10% from the record high on 27 February, a day before the conflict began. A correction is defined as a drop of between 10% and 20% from a recent peak.

Brent crude was down 8.5% at $102.61 a barrel and West Texas Intermediate was 8.3% lower at $90.11. Meanwhile, gold futures on Comex were down 3.3% at $4,426.90 an ounce, while silver was off 1.2% at $68.5, with both precious metals well off earlier lows.

There were also big moves in UK bond markets, as the 10-year gilt yield fell 30 basis points in a matter of seconds.

The upturn in markets came after Trump said the US was postponing "any and all" military strikes against Iranian energy infrastructure following "very good and productive conversations" about a resolution to the hostilities in the Middle East.

Writing on Truth Social, Trump said: "I am pleased to report that the United States of America, and the country of Iran, have had, over the last two days, very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East.

"Based on the tenor and tone of these in depth, detailed and constructive conversations, which will continue throughout the week, I have instructed the department of war to postpone any and all military strikes against Iranian power plants and energy infrastructure for a five day period, subject to the success of the ongoing meetings and discussions."

Once again, Trump's mixed messages were causing wild swings in markets. Stocks had kicked off the session sharply lower, with oil up, as investors reacted to developments over the weekend.

Iran threatened on Sunday to "irreversibly destroy" energy infrastructure across the Middle East after Donald Trump said the US would "obliterate" the country's power plants if it did not reopen the Strait of Hormuz within 48 hours.

In a Truth Social post late on Saturday night, Trump said the US would destroy Iran's "various POWER PLANTS, STARTING WITH THE BIGGEST ONE FIRST!". The US president's threat came just a day after he said he was considering "winding down" the war.

Iran's Revolutionary Guards threatened to completely close the Strait of Hormuz if Trump follows through on his threat.

The Iranian president's speaker, Mohammad Bagher Ghalibaf, said on Sunday: "Immediately after power plants and infrastructure in our country are targeted, vital infrastructure as well as energy and oil infrastructure across the entire region will be considered legitimate targets and will be irreversibly destroyed."

Ghalibaf also said that US-linked financial institutions holding American government bonds would be targeted.

Neil Wilson, UK investor strategist at Saxo Markets, said: "He posted on Truth Social but I would treat this with caution and it seems to already be refuted by Iran...it takes two to TACO remember."

Wilson said the comments trigger fresh questions.

"Can we believe that it's this easy to end the conflict? Is Iran seeking a way out or do they want to continue asymmetric warfare for months? Can the US stop Israel? Right now, my thinking is Trump has looked at the markets this morning and said anything to walk back the 48hr ultimatum issued on Saturday, without losing face.

"A classic TACO. It's incredibly difficult to trade these markets when Trump is swinging between massive escalation and declaring peace/victory...but the market is happy for now that we do not enter a new phase of danger.

"Iran's media says there was no direct or indirect contact with Trump and claims he withdrew after threatening to attack west Asia energy facilities.

"Markets nevertheless are taking the comments at face value for now with stocks rallying sharply along with bonds."

In equity markets, Croda International shot higher after an upgrade to 'buy' from 'sell' at Goldman Sachs.

Miners Anglo American and Antofagasta were among the top performers, along with BA and Iberia owner IAG. Wizz Air and Carnival also rallied.

On the downside, oil giants BP and Shell were among the biggest losers as oil prices fell.

Spire Healthcare tanked after private equity firms Bridgepoint and Triton both said after the close on Friday that they did not plan on making an offer the private hospital operator. Spire said talks with other parties about a potential sale are ongoing and that it is also considering other "appropriate actions to drive long-term, sustainable shareholder value".

Applied Nutrition slid as it backed its full-year guidance but also said it expects "some reduction" in volumes into the Middle East during the second half due to the Iran conflict.

Market Movers

FTSE 100 (UKX) 9,959.58 0.42% FTSE 250 (MCX) 21,413.87 0.34% techMARK (TASX) 5,666.11 0.41%

FTSE 100 - Risers

Flutter Entertainment (DI) (FLTR) 8,594.00p 9.33% Croda International (CRDA) 2,736.00p 7.20% Entain (ENT) 580.00p 5.70% Smiths Group (SMIN) 2,210.00p 5.29% Anglo American (AAL) 3,009.00p 5.20% International Consolidated Airlines Group SA (CDI) (IAG) 360.40p 4.80% Antofagasta (ANTO) 3,289.00p 4.77% Barratt Redrow (BTRW) 266.80p 4.65% Weir Group (WEIR) 2,766.00p 4.59% Halma (HLMA) 3,746.00p 4.03%

FTSE 100 - Fallers

BT Group (BT.A) 203.30p -3.67% Shell (SHEL) 3,310.50p -3.64% BP (BP.) 540.20p -2.99% Tesco (TSCO) 458.30p -2.32% BAE Systems (BA.) 2,201.00p -2.09% Admiral Group (ADM) 3,144.00p -1.68% Centrica (CNA) 200.00p -1.53% Imperial Brands (IMB) 3,015.00p -1.27% Sainsbury (J) (SBRY) 329.40p -1.26% Haleon (HLN) 371.20p -1.25%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 39.36p 7.25% Wizz Air Holdings (WIZZ) 931.00p 5.32% Marshalls (MSLH) 146.00p 4.24% Carnival (CCL) 1,899.50p 4.02% Renishaw (RSW) 3,840.00p 3.63% Oxford Instruments (OXIG) 2,460.00p 3.56% Bodycote (BOY) 632.00p 3.40% Johnson Matthey (JMAT) 1,819.00p 3.27% Close Brothers Group (CBG) 356.20p 3.19% Ceres Power Holdings (CWR) 322.40p 3.06%

FTSE 250 - Fallers

Spire Healthcare Group (SPI) 157.80p -16.21% Applied Nutrition (APN) 199.70p -9.05% Ithaca Energy (ITH) 248.50p -7.38% Harbour Energy (HBR) 279.20p -7.14% The Schiehallion Fund Limited NPV (MNTN) 1.69p -5.06% Diversified Energy Company (DI) (DEC) 1,162.00p -4.91% Oakley Capital Investments Limited (DI) (OCI) 477.50p -2.95% HGCapital Trust (HGT) 396.50p -2.93% Zigup (ZIG) 377.00p -2.57% JPMorgan India Growth & Income (JIGI) 835.00p -2.22%