The FTSE 100 rose 0.30% to close at 10,529.39 on Tuesday, leading Europe’s major indices higher after a softer-than-expected US inflation print reversed early risk aversion tied to the US-Iran conflict. Energy majors supported the index as Brent crude extended a sharp rally.
The FTSE 100 climbed 31.10 points, or 0.30%, to close at 10,529.39 on Tuesday, outperforming its major European peers. The London benchmark traded as low as 10,422.98 during a choppy open before rallying to a session high of 10,552.56.
London outpaces Paris and Frankfurt
The gain marked the best showing among the continent’s major bourses, ahead of a roughly flat CAC 40, a DAX up around 0.1% and an FTSE MIB higher by a similar margin. The pan-European Stoxx 600 finished up 0.2%, with basic resources the standout sector, gaining 2.4%.
London’s edge came from its energy majors. BP drew attention after the company signalled it expects a stronger-than-usual oil trading result for the second quarter, sending its shares sharply higher in early trading. Housebuilding stocks also featured among the session’s better performers.
Oil surge and the Hormuz standoff
The overarching narrative remained the confrontation between the United States and Iran. US Central Command confirmed a third consecutive night of airstrikes against Iranian targets, and President Trump reiterated his intention to enforce what he has termed a full blockade of Iranian ports. Brent crude extended Monday’s 9.6% surge, its largest single-day gain since 2020, trading above $86 a barrel intraday.
Inflation relief triggers the afternoon rally
The turning point came with the US June inflation report. Headline inflation fell 0.4% month-on-month, pulling the annual rate down to 3.5% from May’s 4.2% and undershooting the 3.8% economists had forecast. Core inflation held steady at a 2.6% annual rate, also below consensus.
Traders read the print as reducing the near-term probability of a Federal Reserve rate increase at its late-July meeting. UK gilt yields also pared some of their gains following the US data.
Source: BBN Times
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