5th May 2026 06:59
(Alliance News) - Stocks in London are set to open slightly lower on Tuesday, after tensions re-escalated between the US and Iran.
The US said it had destroyed several Iranian boats, and the UAE reported fresh attacks on its territory, in the sharpest escalation since a fragile ceasefire was agreed in the Middle East war.
After US warships entered the Strait of Hormuz, President Donald Trump said US forces had "shot down" seven small Iranian military boats. A US admiral earlier said six such vessels were destroyed, but Tehran denied any had been sunk. The UAE said an Iranian barrage had targeted energy infrastructure in the country, calling the attack a "dangerous escalation".
Meanwhile, Iranian Foreign Minister Abbas Araghchi has warned the US against a military approach to the crisis over the blocked Strait of Hormuz. "Project Freedom is Project Deadlock," Araghchi wrote on X, referring to US President Trump's initiative to end the blockade of the waterway.
Brent oil was trading at USD113.37 a barrel early Tuesday, higher than USD108.86 late on Friday.
IG says futures indicate the FTSE 100 to open down 3.7 points on Tuesday. The index of London large-caps closed down 0.1% at 10,363.93 on Friday.
Vodafone Group announced the acquisition of all of UK mobile operator VodafoneThree in a buyout of joint venture parter CK Hutchison Group Telecom Holding.
The Berkshire, England-based telecommunications provider said it will pay GBP4.3 billion in cash to cancel the shares in the joint venture held by CK Hutchison.
VodafoneThree is currently a joint venture, with Vodafone Group owning 51% and CK Hutchison the remaining 49% which Vodafone Group is set to acquire.
Sterling was quoted at USD1.3523 early Tuesday, lower than USD1.3626 at the London equities close on Friday. Against the euro, sterling rose to EUR1.1683 from EUR1.1578 a day prior.
The euro traded at USD1.1683 early Tuesday, lower than USD1.1765 late Friday. Against the yen, the dollar was quoted higher at JPY157.24 versus JPY156.74.
In the US on Friday, Wall Street ended lower, with the Dow Jones Industrial Average down 557.37 points, 1.1%, the S&P 500 down 29.37 points, 0.4%, and the Nasdaq Composite down 46.64 points, 0.2%.
In Asia, on Tuesday, markets in China and Japan are closed for Labor Day and Children's Day, respectively. The Hang Seng index in Hong Kong was down 1.3%. The S&P/ASX 200 in Sydney was down 0.4%.
Australia's central bank raised its cash rate target on Tuesday, delivering a third straight increase.
Following the latest meeting of the monetary policy board, the Reserve Bank of Australia hiked interest rates by 25 basis points to 4.35% in May from 4.1% in March, matching the consensus forecast cited by FXStreet.
"Inflation picked up materially in the second half of 2025, and information since the beginning of this year confirms that some of this increase reflected greater capacity pressures. In addition, the conflict in the Middle East has resulted in sharply higher fuel and related commodity prices, which are already adding to inflation.
"There are early signs that many firms experiencing cost pressures are looking to increase prices of their goods and services. Short-term measures of inflation expectations have also risen," the MPB statement said.
Gold was quoted at USD4.545.55 an ounce early Tuesday, lower than USD4,637.78 on Friday.
In Tuesday's corporate calendar, International Workplace Group releases a trading update.
In the economic calendar on Tuesday, the UK has new car sales figures. Also, look out for the US composite and ISM services PMI releases.
By Emma Curzon, Alliance News reporter
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