Rolls-Royce shares boom amid hopes of trade resumption
Shares in the retail stock darling Rolls-Royce skyrocketed as investors went back to bullish ways on news of a ceasefire in the Middle East.
The stock price for the engineering giant soared by as much as 10 per cent as trading opened.
It meant the stock hit 1,259.80p.
The jump in the share price will bring a relief to traders as Rolls-Royce followed mining giants such as Anglo American and Fresnillo in a stock market rally on Wednesday morning.
The aerospace and energy heavyweight was the sixth biggest riser when markets opened.
The mining group Antofagasta topped the FTSE 100 list of risers while the likes of Barclays, JD Sports and Burberry also rebounded.
The rally came as the Brent Crude price tumbled by as much as 15 per cent to a price of $94 per barrel. Natural gas prices also fell while metal prices inched up.
It reflects wider optimism that the two-week ceasefire may hold for a while longer and usher in the re-opening of the Strait of Hormuz.
Rolls-Royce stocks rally
Energy experts have widely warned that it could take weeks for trade flows through the critical stretch of water – where a fifth of global crude oil supplies pass through each year – to resume.
Shipping companies may also hold off for clearer instruction before sending captains to sail through the strait, which is just off the coast of Iran.
Economists have also warned that “damage is already baked in”.
“Significant damage to regional infrastructure as well as energy production and manufacturing capacity means some lasting supply-side damage that will only be gradually recovered,” Kallum Pickering, chief economist at Peel Hunt, said.
“Although no ships appear to be passing through the Strait of Hormuz yet, we can probably expect a gradual build-up of traffic over the coming days once complications around logistics and insurance cover are resolved.”
Political leaders rushed to welcome the ceasefire, with Sir Keir Starmer now set to travel to the Gulf region to engage in diplomatic talks.
There was some trepidation that Wednesday could be a dark day for the region as President Trump threatened to wipe out an entire civilisation.