The FTSE 100 edged higher on Thursday after early losses reversed, with dovish central bank signals helping investors look past falling crude prices.
By 07:23 GMT, the FTSE 100 had gained 0.14%, while Germany’s DAX rose 0.09% and France’s CAC 40 advanced 0.50% as European markets traded broadly firmer.
Sterling also strengthened, rising 0.28% against the U.S. dollar to reach 1.3314, reflecting improved appetite for risk assets across global markets.
The mood was lifted by comments from senior policymakers gathered at the ECB Forum on Central Banking in Sintra, where officials struck a more accommodative tone on interest rates.
Federal Reserve Governor Kevin Warsh, European Central Bank President Christine Lagarde, and Bank of England Governor Andrew Bailey all participated in a panel discussion that buoyed investor confidence.
Jefferies strategist Mohit Kumar described Bailey as “probably the most clear,” arguing the UK is experiencing a “soft patch” where higher mortgage rates have “effectively tightened” monetary policy without the need for further interest rate increases.
Lagarde also pointed to the sharp fall in energy prices, noting oil “was at $120 a few weeks ago and is now close to $70,” adding further weight to the case against additional rate hikes.
Jefferies said the discussion “supports our view of no (further) hikes this year from the Fed, ECB or BoE,” a statement that reinforced the broadly positive tone across equity markets.
Oil prices remained under pressure as diplomatic signals between Washington and Tehran continued to suggest progress in nuclear negotiations.
U.S. President Donald Trump told reporters that “the denuclearization of Iran is moving along well” and described talks held in Doha as “very good,” while Vice President JD Vance said “talks are going well,” though cautioned negotiations were still at an early stage.
Qatar and Pakistan said in a joint statement that “positive progress was made” during indirect talks in Doha between U.S. and Iranian officials, with further negotiations expected after funeral processions for Iran’s former Supreme Leader.
Iran’s Deputy Foreign Minister Kazem Gharibabadi struck a more cautious note, writing on X that “Hormuz is defined under Iran’s command, not CENTCOM” and that a military summit “cannot establish legal order and security for the Persian Gulf.”
Brent crude declined 1.23% to $70.69 a barrel, while WTI crude fell 1.3% to $67.69 as the prospect of increased Iranian supply weighed on energy markets.
Gold futures slipped 0.20% to $4,074.67 an ounce, though spot gold bucked the trend and rose 0.76% to $4,062.08 as investors balanced risk appetite against lingering geopolitical uncertainty.
Semiconductor stocks faced headwinds after reports emerged that Meta plans to monetise excess artificial intelligence computing capacity through a cloud offering, a move that rattled chip-related equities.
The development weighed on Asian technology stocks overnight, with South Korea’s KOSPI among the weakest-performing major indices as investors reassessed demand assumptions for AI infrastructure.
Among UK-listed stocks, Currys (LSE: CURY) traded higher after the electricals retailer reported an 18% increase in annual profit and said trading had started strongly in the new financial year, with growth across both its UK and Nordic businesses supporting the upbeat outlook.