UK stocks made modest gains on Tuesday as Bitcoin extended its rally to a more than three-month high, supporting broader investor risk appetite.
The FTSE 100 gained 0.15% as of 03:25 ET, while Germany’s DAX rose 0.24% and France’s CAC 40 added 0.26% in early European trading.
Sterling held broadly steady against the US dollar, trading 0.03% higher at $1.3640 during the session.
Bitcoin (COIN:BTCUSD) climbed above $80,000, trading around $80,323 after reaching a high of $81,237.94 during Asian trading hours.
That level represented Bitcoin’s strongest position since mid-May, marking a significant recovery for the world’s largest cryptocurrency by market capitalisation.
The cryptocurrency has gained approximately 28% during August and is on course for its strongest monthly performance since November 2024.
Recent buying momentum has been supported by a softer US dollar following Treasury Secretary Scott Bessent’s plans for Treasury bond buybacks, which renewed interest across crypto markets.
Bitcoin has also risen around 16% since US President Donald Trump called on Congress last week to approve legislation providing greater regulatory clarity for cryptocurrencies.
Despite the positive tone across risk assets, geopolitical tensions surrounding Iran continued to weigh on investor sentiment in the background.
US War Secretary Pete Hegseth said on Monday that Washington was “by no means” ruling out military action against Iran, telling reporters that “if we need to use kinetic strikes, we’ll use them.”
Hegseth indicated that economic pressure remained the preferred approach, though his comments added to an already tense diplomatic backdrop between Washington and Tehran.
Bessent reinforced that message, warning that “no one is above the reach of US sanctions” and raising the possibility that Chinese banks involved in purchases of Iranian oil could face measures.
The US also announced additional sectoral sanctions and an “Operation Economic Outcast” campaign, with Bessent warning that “the clock just started ticking” on further economic pressure.
Iranian official Mohsen Rezaei responded by warning that Tehran could halt all Gulf oil exports if the “economic war” continued, escalating rhetoric in the region.
Geopolitical tensions have remained elevated since US and Israeli strikes reportedly killed Iran’s Supreme Leader on February 28, with Iran subsequently retaliating and partially restricting traffic through the Strait of Hormuz.
An April ceasefire reduced the intensity of the conflict, though periodic flare-ups have continued to keep energy markets on alert throughout the year.
Energy prices fell despite the ongoing uncertainty, with Brent crude declining 0.72% to $89.89 a barrel and WTI dropping 0.74% to $89.91.
Precious metals were also slightly weaker, with gold futures slipping 0.016% to $4,697.36 and spot gold declining 0.22% to $4,641.30.
On the corporate front, Melrose (LSE:MRO) said GKN Aerospace is targeting September 28 for the restoration of full operations at its Garden Grove facility following a previous incident.
Melrose also launched a claims programme worth up to $100 million, while the Orange County District Attorney’s Office decided not to pursue criminal charges relating to the matter.
Meanwhile, easyJet (LSE:EZJ) and Apollo (NYSE:APO) extended the deadline for publishing the scheme document connected with their proposed transaction to October 15, allowing further time for discussions with aviation regulators to continue.