London equities moved higher on Monday after officials said the United States and Iran reached a deal that declared an immediate end to military operations and reopened the Strait of Hormuz, a development that drove crude prices substantially lower.
The FTSE 100 was up 0.70% as of 03:20 ET (07:20 GMT). Continental European indices rallied more strongly, with Germany's DAX climbing 1.88% and France's CAC 40 adding 1.69%. Sterling strengthened 0.22% against the dollar, trading at $1.3436.
Market reactions extended to commodity markets. Brent crude fell 4.91% to $83 a barrel and WTI declined 5.67% to $80.05 a barrel. Precious metals moved in the opposite direction, with spot gold rising 2.26% to $4,314.53 a troy ounce.
Political and diplomatic developments were front and center. Pakistani Prime Minister Shehbaz Sharif announced the agreement on X, saying both sides had declared "the immediate and permanent termination of military operations on all fronts, including in Lebanon," and that a formal signing ceremony was planned for June 19 in Geneva, Switzerland.
U.S. President Donald Trump posted confirmation on his social platform, writing: "The Deal with the Islamic Republic of Iran is now complete. Congratulations to all! I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade. Ships of the World, start your engines. Let the oil flow!"
Iran's Supreme National Security Council issued a statement confirming the memorandum of understanding and saying military operations on all fronts would end "immediately and permanently." The council said the deal would be formally signed on June 19 and that negotiations on a final agreement would begin only after the other side implements its commitments.
Despite mutual announcements, key details and sequencing remain contested. Iran's Deputy Foreign Minister Kazem Gharibabadi said the proposed 60-day negotiations would begin only after the United States releases frozen funds, lifts the blockade and formally ends the war.
That characterization was directly disputed by a senior U.S. official, who told Axios: "This is completely not true. This is a pay-for-performance deal and no frozen funds will be released without the Iranians implementing their commitments."
Complicating the public picture, Iran's state-affiliated Mehr News published what it described as a 14-point draft memorandum that purported to include the release of $24 billion in frozen Iranian assets during the 60-day talks, with half available before negotiations begin. Neither Iranian nor U.S. officials publicly confirmed the contents of that draft.
The timing of the announcement also coincided with a separate military action. Hours before the deal was confirmed, Israel struck a Hezbollah command center in Beirut's southern suburbs. President Trump sharply rebuked the strike, writing: "This morning's attack on Beirut should not have happened." According to an Israeli news service, Prime Minister Benjamin Netanyahu told Mr. Trump that Israel would not withdraw from Lebanon and did not consider itself bound by the Lebanese clause.
Domestic corporate and media developments in the U.K. were also noted. Sigma Healthcare Ltd said it had withdrawn from the bidding process for Boots Group, telling the stock exchange that the acquisition would not meet Sigma's strategic and capital investment objectives. Separately, the BBC is set to cut hundreds of jobs across its core news division next week as part of broader plans that are expected to result in about 2,000 total job losses and save hundreds of millions of pounds, according to a report that cited people close to the situation.
Investors reacted to a mix of calmer shipping routes and continued geopolitical uncertainty. The market moves reflect immediate relief in energy markets from the prospect of resumed flows through the Strait of Hormuz, while also highlighting unresolved issues such as the sequence and conditions attached to frozen assets and the persistence of regional military actions.
Markets to watch in the near term include energy and metals, foreign exchange and regional sovereign-risk sensitive assets, as policymakers and officials clarify the operational steps that will follow from the memorandum of understanding and the June 19 signing.