The FTSE 100 made steady progress on Tuesday as oil prices fell amid renewed talk of a peace deal in the Middle East.
The FTSE 100 index closed up 21.68 points, or 0.2%, at 10,879.38. The FTSE 250 ended up 234.53 points, 1.0%, at 24,459.30, while the AIM All-Share closed up 5.75 points, 0.8%, at 774.36.
Oil prices headed towards 80 dollars a barrel after US Treasury Secretary Scott Bessent said a deal could be reached with Tehran by Wednesday on re-opening the Strait of Hormuz to shipping traffic.
Mr Bessent told CNBC that “I think there is a chance we may have a deal today or tomorrow to open the strait” – a key sticking point in ceasefire talks with Iran.
“So you know, I’d expect the energy prices to settle back down, which, as I said, will be good for the entire world,” he said.
In response, Brent oil for October delivery traded lower at 80.60 dollars a barrel on Tuesday afternoon, from 83.92 dollars late on Monday. The falls dragged BP and Shell lower, by 4.9% and 2.5% respectively.
BP also unveiled better-than-expected second quarter results with underlying replacement profit before interest and tax soaring to 10.31 billion dollars in the quarter ending on June 30 from 5.25 billion dollars the year prior, ahead of the company-compiled consensus of 9.48 billion dollars.
New chief executive Meg O’Neill called it a “strong quarter”, but said there were areas “where our performance fell short”.
Ms O’Neill, who joined BP in April from Woodside Energy, said the firm has made “good progress” strengthening its balance sheet. On Tuesday, the oil major said it was looking to offload Archaea, its US biogas business, which it bought in 2022 for 3.3 billion dollars.
Strengthening the balance sheet was one of five priorities Ms O’Neill laid out to “deliver a step change in performance”.
“We need to take a clear look at ourselves: assessing what needs to change, stopping what holds us back and building strength where it matters. We have to get fit to grow,” she said.
Analysts at RBC Capital Markets said clearly the “devil is in the detail, and BP will need to ‘walk the talk’ consistently over the coming quarters to re-build investor confidence”.
“That said, ownership of BP’s historical failings is a good step forward for the investment case,” they said.
In European equities on Tuesday, the CAC 40 in Paris closed up 0.6%, while the DAX 40 in Frankfurt ended up 0.8%.
Stocks in New York were higher. The Dow Jones Industrial Average was up 1.6%, the S&P 500 index was 1.3% higher, hitting an all-time best, and the Nasdaq Composite advanced 1.9%.
US markets are gearing up for results from SpaceX, its first since its initial public offer in June.
After a strong start, shares in the company which owns the Starlink satellite internet system and social media platform X, have fallen back to trade below the 135 dollars per share IPO price. They were up 4.6% at 119.82 dollars on Tuesday.
Visible Alpha consensus expects revenue of 6.86 billion dollars, an operating loss of 1.62 billion dollars and diluted losses per share of 0.19 dollars.
Attention will be on the outlook and capital expenditure, with the latter forecast to increase to 118.4 billion dollars in 2028 from 48.7 billion dollars this year.
Kathleen Brooks, research director at XTB, noted that earnings are not the only big event for the SpaceX share price this week.
On August 6, a lock-up period for SpaceX shares will expire, which could more than double the tradable float of SpaceX shares, Ms Brooks said.
“Thus, tonight’s numbers may not be the biggest driver for SpaceX shares,” she added.
The yield on the US 10-year Treasury narrowed to 4.64% on Tuesday from 4.69% on Monday. The yield on the US 30-year Treasury fell to 5.20% from 5.23%.
The pound traded at 1.3445 dollars on Tuesday afternoon, up from 1.3425 dollars at the equities close on Monday. Against the euro, sterling edged up to 1.1674 euros from 1.1669 euros.
The euro stood higher at 1.1517 dollars against 1.1505 dollars. Against the yen, the dollar was higher at 157.56 yen, compared with 156.78 yen.
In London, rising metals prices underpinned the FTSE 100’s gains, boosting mining stocks.
Gold was higher at 4,078.23 dollars an ounce on Tuesday from 4,036.96 dollars on Monday. Silver rose 3.0% while copper was trading 1.6% to the good compared with the same time on Monday.
Mining stocks Antofagasta, Endeavour Mining and Anglo American were prominent blue-chip gainers, up 6.9%, 3.4% and 5.5% respectively.
At the other end of the blue-chip index, Smith & Nephew fell 6.3% after cutting its full-year sales growth guidance to 4% from around 6%, as second-quarter underlying revenue growth of 1.6% missed consensus expectations because of weaker demand for US hip and knee implants.
“Not a great print and the revenue miss and lowered guidance will weigh on the shares,” analysts at Panmure Liberum said.
Travis Perkins stole the show on the FTSE 250, surging 18%.
The Northampton-based building materials distributor and retailer said it is seeing encouraging early progress in its operational turnaround as it reported better-than-expected interim operating profit.
Adjusted operating profit rose 6.3% to £67 million in the six months ended June 30 from £63 million a year before, which analysts at Stifel said was above £60 million market consensus.
But Irn-Bru owner AG Barr fell 5.4% after it said revenue was impacted by reduced stock availability, primarily from internal supply chain issues.
Elsewhere, CLS Holdings dropped 8.0% as it said full-year earnings will be below market expectations.
Leasing transactions in the first half of 2026 have been steady, but slower than expected, while its largest tenant at Spring Gardens is no longer seeking a short-term extension to a lease.
The biggest risers on the FTSE 100 were Antofagasta, up 252.0p at 3,931.0p, Halma, up 194.0p at 3,742.0p, Anglo American, up 202.0p at 3,907.0p, Polar Capital Technology Trust, up 34.5p at 669.0p, and Fresnillo, up 131.0p at 2,629.0p.
The biggest fallers on the FTSE 100 were Smith & Nephew, down 75.0p at 1,122.0p, BP, down 27.1p at 525.0p, Coca-Cola Europacific Partners, down 325.0p at 7,735.0p, Shell, down 84.0p at 3,321.5p and Pearson, down 22.0p at 1,227.5p.
Wednesday’s economic calendar has a batch of composite PMI readings including the UK at 09:30 BST. In addition, ADP payrolls data and the ISM services PMI will be released.
Wednesday’s UK corporate calendar has half-year results from miner Glencore and insurer Legal & General plus a trading statement from Next.
– Contributed by Alliance News