FTSE 100 Gains on Reports of Tentative U.S.-Iran Deal to Reopen Hormuz Strait

London's FTSE 100 and other European stocks advanced on Tuesday, buoyed by reports of a potential interim agreement between the United States, Iran, and Oman that would reopen the strategically vital Strait of Hormuz.

As of 07:14 GMT, the UK's FTSE 100 index was up 0.41%. The positive sentiment was shared across the continent, with Germany’s DAX adding 0.49% and France’s CAC 40 gaining 0.12%.

Details of the Potential Agreement

Reports of the deal, which helped calm investor fears of a wider conflict in the Gulf, suggest a 60-day temporary arrangement is near. According to Axios, which cited a U.S. official and a regional source, Iran's leadership has completed its internal approval process for the framework.

The draft agreement reportedly outlines a plan for maritime traffic:

• Inbound vessels to the Gulf would use a northern lane through Iranian waters.
• Outbound traffic would use a southern lane through Omani waters.
• Naval mines would be cleared from the median lane within 30 days.

U.S. President Donald Trump told Fox News that the strait would be opened "very soon," adding a warning that Iran would be "hit really hard" if it were to reverse its position. U.S. CENTCOM separately stated that the strait's southern route "remains free and open," noting that U.S. forces have escorted over 1,000 vessels through it in the last three months.

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Market Impact

The easing of geopolitical risk influenced commodity and currency markets. Brent crude, the international oil benchmark, edged up 0.77% to $79.97 a barrel. In precious metals, spot gold, often seen as a safe-haven asset, rose 2.2% to $4,166.96 an ounce.

In foreign exchange, the British pound firmed 0.08% against the U.S. dollar, trading at $1.3460.

Corporate Movers

Within the FTSE 100, several individual companies made notable moves on corporate news. Shares in retailer Next (NXT.L) rose after it raised its annual profit outlook following strong quarterly sales.

In the insurance sector, Hiscox (HSX.L) gained after increasing its retail growth forecast, while shares in rival Beazley (BEZG.L) were under pressure after it reported a halving of its first-half profit. Mining giant Glencore (GLEN.L) also saw its shares climb after reporting a jump in first-half earnings.