The FTSE 100 opened with an increase of 51 points, reaching 10,787, despite a broader global tech selloff. This positive movement was largely attributed to a reported de-escalation in tensions between the US and Iran, leading to a 10% drop in Brent crude oil prices from Friday morning. Analyst Kathleen Brooks at XTB noted that this development dramatically reduced the geopolitical risk premium, raising questions about the long-term impact on oil prices and inflationary concerns ahead of key central bank meetings.
AstraZeneca, Vodafone, and Cranswick were among the companies leading Monday's UK company news. AstraZeneca saw its shares rise by 1.1%, while Vodafone surged 3.6% after reporting strong financial results. Vodafone's reported service revenue increased by 9.8% to 8.6 billion euros, and total revenue climbed 9.7% to 10.3 billion euros, partly due to its merger with Three UK. The company now expects to reach the upper end of its full-year guidance. AstraZeneca, despite a disappointing CARDIO-TTRansform trial outcome, is on track to deliver its financial goals, with CEO Pascal Soriot highlighting tozorakimab as a potential $5 billion-plus respiratory opportunity. Other companies driving the index higher included travel-related names like IAG (up 3.2%) and Rolls-Royce (up 2.6%), as well as banks, miners, and retailers.
Central bank decisions were also a focus for the week, with the US Federal Reserve, Bank of England, and Bank of Japan all scheduled to announce interest rate decisions. The Bank of England's Monetary Policy Committee was widely expected to hold interest rates, though RSM UK chief economist Thomas Pugh suggested that oil prices remaining near $100 per barrel over the summer could lead to a September rate hike. The de-escalation in the Middle East, with reports of the US pausing strikes and Iran halting attacks, contributed to the positive market sentiment, although the situation was still considered unresolved by some analysts like Brooks, who cautioned against a significant decline below $85 per barrel.
