London markets closed higher on Tuesday as rising metals prices lifted mining stocks and oil retreated sharply on renewed hopes of a Middle East ceasefire deal.
The FTSE 100 index ended the session up 21.68 points, or 0.2%, closing at 10,879.38 after a steady day of trading across London markets.
The FTSE 250 outperformed its larger counterpart, gaining 234.53 points, or 1.0%, to finish at 24,459.30, while the AIM All-Share closed up 5.75 points at 774.36.
Oil prices slid toward 80 dollars a barrel after US Treasury Secretary Scott Bessent said a deal with Tehran on reopening the Strait of Hormuz to shipping traffic could come as soon as Wednesday.
Mr Bessent told CNBC that “I think there is a chance we may have a deal today or tomorrow to open the strait,” describing it as a key sticking point in ongoing ceasefire negotiations with Iran.
“So you know, I’d expect the energy prices to settle back down, which, as I said, will be good for the entire world,” he added.
Brent crude for October delivery fell to 80.60 dollars a barrel on Tuesday afternoon from 83.92 dollars late on Monday, dragging BP (BP.L) down 4.9% and Shell (SHEL.L) lower by 2.5%.
BP also reported better-than-expected second quarter results, with underlying replacement profit before interest and tax soaring to 10.31 billion dollars from 5.25 billion dollars a year earlier, well ahead of the company-compiled consensus of 9.48 billion dollars.
New BP chief executive Meg O’Neill, who joined the firm in April from Woodside Energy, called it a “strong quarter” but acknowledged there were areas “where our performance fell short.”
Ms O’Neill outlined five priorities for the company and said it had made “good progress” strengthening its balance sheet, adding: “We need to take a clear look at ourselves: assessing what needs to change, stopping what holds us back and building strength where it matters. We have to get fit to grow.”
BP also said on Tuesday it was looking to offload Archaea, its US biogas business acquired in 2022 for 3.3 billion dollars, as part of its broader strategic repositioning under new leadership.
Analysts at RBC Capital Markets warned that the “devil is in the detail, and BP will need to ‘walk the talk’ consistently over the coming quarters to re-build investor confidence,” while noting that “ownership of BP’s historical failings is a good step forward for the investment case.”
Mining stocks were among the strongest performers of the session, with gold climbing to 4,078.23 dollars an ounce from 4,036.96 dollars on Monday, silver rising 3.0%, and copper gaining 1.6%.
Antofagasta (ANTO.L) surged 6.9%, Anglo American (AAL.L) jumped 5.5%, and Endeavour Mining (EDV.L) gained 3.4%, making them among the most prominent blue-chip gainers of the day.
At the opposite end of the index, Smith & Nephew (SN.L) fell 6.3% after cutting its full-year sales growth guidance to 4% from around 6%, following weaker-than-expected demand for US hip and knee implants.
Analysts at Panmure Liberum said it was “not a great print and the revenue miss and lowered guidance will weigh on the shares” as the medical devices company disappointed investors.
Travis Perkins (TPK.L) was the standout performer on the FTSE 250, surging 18% after the Northampton-based building materials distributor reported better-than-expected interim results showing adjusted operating profit rising 6.3% to 67 million pounds from 63 million pounds a year earlier.
Analysts at Stifel noted the result came in above the 60 million pound market consensus, reflecting encouraging early progress in the company’s operational turnaround strategy.
Irn-Bru owner AG Barr (BAG.L) fell 5.4% after warning that revenue was impacted by reduced stock availability stemming primarily from internal supply chain issues, while CLS Holdings (CLI.L) dropped 8.0% after saying full-year earnings would fall below market expectations.
Across the Atlantic, US stocks advanced strongly, with the Dow Jones Industrial Average up 1.6%, the S&P 500 gaining 1.3% to hit an all-time high, and the Nasdaq Composite rising 1.9% ahead of highly anticipated results from SpaceX.