As it happened: FTSE 100 relief rally runs out of steam as BP and Shell weigh; Oil hits three-month low
Welcome back to the City AM liveblog.
Market sentiment is starting the new week on a positive note after Pakistan said an official peace deal between the US and Iran would be signed this Friday in Switzerland.
Asian equities were sent soaring on the news after over a 100 days of uncertainty gripped global markets, with investors fearing inflationary impacts of the war.
Meanwhile, oil is moving lower, falling 3.8 per cent to under $84 a barrel after Trump declared the US-Iran deal would re-open the Strait of Hormuz. But the drop is weighing on the FTSE 100, where oil giants BP and Shell are tumbling leading to the City’s blue-chip index to miss out on some of the wider market euphoria.
Donald Trump posted on social media following the announcement of the deal that here authorises the “toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorise the immediate removal of the United States Naval blockade.
“Ships of the world, start your engines. Let the oil flow!”
Fears of an oil shortage have fanned the flames of inflation across global economies. The US’ consumer price growth came in at 4.2 per cent – a three-year high – earlier this month led by a spike in energy prices.
The confirmation of a deal follows Iran’s chief negotiator Mohammad Bagher Ghalibaf casting doubt on peace hopes after stating that the latest strike on Lebanon from Israel showed the US was not fulfilling its commitments and either lacks the will or ability to do so.
Ghalibaf said there was “no point” in talking about continuing “down this path”.
But Trump has said strike on Beirut earlier on Sunday “should not have happened”.
We’ll be bringing you all the latest market updates and analysis.
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