London's FTSE 100 index is anticipated to open higher, with UK stock futures showing gains. This upward trend is primarily driven by a significant drop in oil prices. Brent crude fell 5.4% to $79.29 a barrel, and West Texas Intermediate was down 5.7% at $75.79, after US Treasury Secretary Scott Bessent indicated that a deal to open the Strait of Hormuz was imminent.
The prospect of reopening the Strait of Hormuz, a critical energy route, has alleviated concerns about prolonged disruptions and improved global risk appetite. President Donald Trump had also commented on Monday that the waterway could fully reopen, and Secretary Bessent echoed this sentiment, stating there was a chance for a deal "today or tomorrow." This geopolitical development has positively impacted market sentiment, leading the Dow and S&P 500 to reach all-time highs.
While the broader market, especially the mining sector, benefited from improved global growth sentiment and rising copper prices, some heavily weighted stocks faced pressure. Energy giants BP and Shell saw their shares decline due to the tumbling oil prices. HSBC, despite reporting a better-than-expected 23% jump in first-half profit to $19.5 billion and announcing a $1 billion share repurchase plan, also saw its stock fall. Fresnillo, a precious metals miner, stood out with a 75% jump in revenue to $3.4 billion, exceeding expectations.
