London's benchmark index climbed on Tuesday as fragile optimism surrounding U.S.-Iran negotiations lent support to domestic equities, offsetting a fresh jump in oil prices that pushed Brent crude closer to $100 a barrel.
The FTSE 100 rose 0.75%, outpacing stocks on the Continent where Germany's DAX declined 0.28% and France's CAC 40 fell 0.38%. Sterling fell 0.21% to $1.3473, as of 03:15 ET (07:15 GMT).
Energy markets were volatile. Brent crude rallied more than 2% a barrel, partially recovering from a selloff on Monday, after U.S. Central Command said it had carried out "self-defence strikes" on Iranian missile launch sites and boats near the Strait of Hormuz.
The strait has seen a severe disruption to traffic since hostilities began, with Tehran effectively halting nearly all non-Iranian shipping through the waterway. That choke point accounts for roughly a fifth of global oil and liquefied natural gas flows, a factor reflected in the heightened crude prices.
A Nikkei report cited in markets indicated Iran had agreed in principle to remove mines from the strait within 30 days under an emerging memorandum of understanding. The report added to the cautious optimism that diplomatic steps could reduce some immediate sources of shipping risk.
On the domestic economic front, the British Retail Consortium reported that shop price inflation accelerated to 1.2% in May from 1.0% in April. The BRC attributed the rise to supply disruption related to the conflict and higher energy costs.
Within retail, furniture and health and beauty products posted the largest price increases, reflecting higher raw-material and shipping costs. In contrast, food inflation eased to a one-year low of 2.7%. The BRC urged the government to take stronger measures to contain costs for consumers.
Diplomatic developments also produced some headline-grabbing statements. U.S. President Donald Trump posted on Truth Social that Iran's enriched uranium would be "turned over to the United States to be brought home and destroyed" or destroyed in place "in conjunction and coordination" with Tehran. A U.S. official confirmed Iran had agreed in principle to those conditions.
At the same time, Iranian Foreign Ministry spokesman Esmaeil Baqaei warned that "the frequent changes in the positions of American officials complicate every negotiation," while Secretary of State Marco Rubio cautioned a deal could "take a couple days," tempering expectations of an immediate settlement.
UK companies round up
In corporate news, Kingfisher reported a 0.7% decline in first-quarter underlying sales amid a soft market backdrop. The retailer said its full-year profit guidance remains intact, noting that core categories demonstrated resilience despite a late spring start that weighed on footfall and seasonal demand.
Separately, market data displays in coverage included short ticker references such as LCO, KGF and UK100 alongside moves in Brent oil, reflecting the interplay between energy prices, individual stocks and the broader index.
This mix of diplomatic hope and commodity-driven risk left investors navigating competing forces: potential easing of maritime disruption on one hand, and the immediate price pressure from a rebound in crude on the other.