24th Mar 2026 06:56
(Alliance News) - Stocks in London are set to open little changed on Tuesday, as investors weigh signs of potential de-escalation in the Middle East against continued uncertainty over the Strait of Hormuz.
IG says futures indicate the FTSE 100 to open 3.6 points lower, marginally down at 9,890.55 on Tuesday. The index of London large-caps closed 0.2% lower at 9,894.15 on Monday.
US President Donald Trump said he had "very good" talks with an unidentified Iranian official after abruptly shelving plans for fresh attacks, even as Washington's ally Israel vowed to continue strikes on the Islamic republic.
The disclosure – denied by Tehran, which accused Trump of manipulating energy markets – came ahead of a Monday night deadline set by Trump for Iran to reopen the Strait of Hormuz or face US threats to "obliterate" its power plants.
Axios, citing an Israeli official, identified the contact as Mohammad Bagher Ghalibaf, Iran's parliamentary speaker. Reports from Axios and Reuters also suggest US envoys Steve Witkoff and Jared Kushner could meet an Iranian delegation in Pakistan as soon as this week, with Vice President JD Vance potentially joining.
Michael Brown, senior research strategist at Pepperstone, said: "The rollercoaster ride continues. Headline whiplash has seldom been greater. The noise/signal ratio remains off the charts."
UK Prime Minister Keir Starmer warned that the conflict with Iran could last "for some time", telling MPs it was difficult to predict its duration and cautioning against the "false comfort" of expecting a quick resolution. He also stressed that the conflict is "not our war, and we are not getting dragged into this war" as he faced questions from senior MPs.
Pepperstone's Brown said: "The signal here is clear, and is as follows – Trump has pulled back on the ultimatum issued over the weekend, is seemingly seeking de-escalation for the first time since conflict begun, and looks to be trying to find an off-ramp to allow that to happen. To me, this is by far the most important part of all this.
"That said, time for some caveats. While a positive development, Trump has only mentioned power plants, meaning the potential for kinetic action elsewhere is still present. Plus, the 5-day pause hinges on progress being made in talks, which is clearly not guaranteed. lastly, at risk of stating the obvious, the Strait of Hormuz is still essentially impassable, and commodity supply continues to tighten as a result."
Brent oil was trading at USD102.59 a barrel early Tuesday, slightly higher than USD102.07 late Monday.
Brown added: "Despite those caveats, participants – rightly, in my view – focused on the positives yesterday, and signs that we might finally be seeing a faint chink of light at the end of the tunnel when it comes to the ongoing Middle East conflict."
Sterling was quoted at USD1.3404 early Tuesday, higher than USD1.3390 at the London equities close on Monday. Against the euro, sterling rose to EUR1.1571 from EUR1.1566 a day prior.
The euro traded at USD1.1584 early Tuesday, higher than USD1.1579 late Monday. Against the yen, the dollar was quoted at JPY158.67, lower versus JPY158.79.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 1.4%, the S&P 500 up 1.2% and the Nasdaq Composite up 1.4%.
In Asia on Tuesday, markets recuperated somewhat after steep losses on Monday.
The Nikkei 225 index in Tokyo was up 1.2%. Japan said it will release another portion of its strategic oil reserves from Thursday, Prime Minister Sanae Takaichi said, after Tokyo began tapping stockpiles last week. Last Monday, Japan started releasing 15 days' worth of private-sector petroleum reserves, and Takaichi had previously said a month's worth of government reserves would also be used. Japan relies on the Middle East for around 95% of its oil imports.
Meanwhile, Japan's services and manufacturing sectors both lost momentum in March, with the flash composite purchasing managers' index falling to 52.5 points from 53.9 in February. The services PMI eased to 52.8 from 53.8, while manufacturing slipped to 51.4 from 53.0, and the manufacturing output index edged down to 51.8 from 54.2.
In China, the Shanghai Composite was up 1.3%, while the Hang Seng index in Hong Kong was up 2.2%.
The S&P/ASX 200 in Sydney closed up 0.2%, as Australia and the EU agreed a sweeping new trade deal after years of negotiations. European Commission President Ursula von der Leyen and Australian Prime Minister Anthony Albanese struck the agreement to boost exports amid global trade uncertainty. The deal also includes cooperation on defence and critical raw materials.
Back in the UK, Chancellor Rachel Reeves will set out steps to protect consumers from "unfair price rises" after Prime Minister Starmer signalled a crackdown on profiteering amid rising oil and fuel costs. Reeves will outline measures in a statement to MPs on Tuesday following discussions at an emergency Cobra meeting. Downing Street said the plans include an "anti-profiteering framework" to help the Competition & Markets Authority tackle price gouging linked to the Middle East crisis.
Gold was quoted at USD4,387.49 an ounce early Tuesday, higher than USD4,376.19 on Monday.
In Tuesday's corporate calendar, it is a busy day for results in London, with Bellway reporting half year results, and Fevertree Drinks, Henry Boot, Kingfisher, Xaar and Staffline Group publishing full year results. YouGov reports half year results.
In the economic calendar on Tuesday, flash composite readings for France, Germany, the eurozone, the UK and the US are due, alongside Canada manufacturing sales and US nonfarm productivity.
By Eva Castanedo, Alliance News reporter
Comments and questions to [email protected]
Copyright 2026 Alliance News Ltd. All Rights Reserved.