5th Aug 2026 06:59
(Alliance News) - Stocks in London are set to open higher on Wednesday as optimism over a potential US-Iran agreement to reopen the Strait of Hormuz lifted sentiment and pushed oil prices lower.
IG says futures indicate the FTSE 100 to open 27.4 points higher, 0.3%, at 10,906.78 on Wednesday. The index of London large-caps closed up 0.2% at 10,879.38 on Tuesday.
US President Donald Trump warned Iran it would be "hit very hard" unless the strategic Strait of Hormuz is reopened "very soon", while insisting negotiations to end months of conflict were progressing.
"We're having very good discussions," Trump told Fox News during a visit to California. "The only thing that matters is action. And they want to make a deal. We'll see what happens."
Axios reported that the US, Iran and Oman were close to reaching an interim agreement to reopen the strait, which Washington hopes to announce on Wednesday.
Citing unnamed regional officials and a US official, the report said the proposed deal would establish a 60-day arrangement guaranteeing safe passage through the Strait of Hormuz between Iran and Oman. The agreement would not involve the payment of tolls and could later be extended.
Brent oil was trading at USD78.64 a barrel early Wednesday, lower than USD80.60 late Tuesday.
Sterling was quoted at USD1.3456 early Wednesday, higher than USD1.3445 at the London equities close on Tuesday. Against the euro, sterling fell to EUR1.1664 from EUR1.1674 a day prior.
The euro traded at USD1.1537 early Wednesday, higher than USD1.1517 late Tuesday.
Against the yen, the dollar was quoted at JPY157.64, higher versus JPY157.56.
US Treasury Secretary Scott Bessent said last week's historic joint intervention by the US and Japan to support the yen was aimed at preventing broader instability across Asian currency markets.
Speaking to CNBC, Bessent compared the situation with the Asian financial crisis of the late 1990s, arguing that an excessively weak yen risked dragging down other regional currencies.
"A stable yen is not only important for the US, but very important for the entire region," he said, adding that further yen weakness could spill over into the South Korean won and the Chinese renminbi.
In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average up 1.7%, the S&P 500 up 1.8% and the Nasdaq Composite up 2.6%.
Meanwhile, the Trump administration met with technology executives to finalise a security review process for advanced artificial intelligence models before they are released, although US media reported the framework would apply only to "closed" AI models.
In Asia on Wednesday, the Nikkei 225 index in Tokyo surged 3.5%. In China, the Shanghai Composite rose 1.5%, while the Hang Seng index in Hong Kong gained 0.2%. The S&P/ASX 200 in Sydney added 0.9%.
Gold was quoted at USD4,152.32 an ounce early Wednesday, higher than USD4,078.23 on Tuesday.
In Wednesday's corporate calendar, Coca-Cola HBC, Glencore and Legal & General report half-year results, while Next issues a trading statement, among other corporate updates.
In the economic calendar on Wednesday, a raft of services and composite PMI readings is due from Spain, France, Germany, the eurozone, the UK and the US. The eurozone also releases producer price data, while the US publishes the ADP employment report and EIA crude oil stocks.
By Eva Castanedo, Alliance News senior economics reporter
Comments and questions to [email protected]
Copyright 2026 Alliance News Ltd. All Rights Reserved.