The FTSE 100 closed higher on Tuesday, driven by strong gains in the mining sector, while oil prices retreated amid ongoing uncertainty in the Middle East.
London’s benchmark index ended the session up 34.56 points, 0.3%, at 10,373.51, while the FTSE 250 gained 132.58 points, 0.6%, to close at 23,378.36.
The AIM All-Share slipped 0.92 of a point, 0.1%, to finish at 818.36, as smaller companies failed to keep pace with blue-chip gains.
US President Donald Trump claimed peace talks with Iran were progressing rapidly and that Israel and Hezbollah had agreed to a ceasefire, although Israeli strikes resumed on Tuesday.
Susannah Streeter, chief investment strategist at Wealth Club, said: “There is no concrete progress in Middle East negotiations to hang a hat on, but investors appear broadly optimistic that a longer-term resolution will be reached.”
Brent crude for August delivery fell to 94.68 dollars a barrel on Tuesday, down from 97.22 dollars at Monday’s London equities close, remaining well below the 100 dollar level seen recently.
David Morrison at Trade Nation noted that despite oil market turmoil, “prices remained near the bottom of their recent range”, signalling some stability despite geopolitical tensions continuing to weigh on sentiment.
In European equity markets, the CAC 40 in Paris rose 0.8% and Frankfurt’s DAX 40 gained 0.5%, as broader optimism around technology and AI investments supported sentiment across the continent.
In New York, the Dow Jones Industrial Average rose 0.3%, the S&P 500 climbed 0.2%, and the Nasdaq Composite firmed 0.3%, building on record highs posted in the previous session.
Nvidia shares opened higher on Tuesday after jumping more than 6% on Monday, following the unveiling of a powerful laptop chip for Windows machines, continuing the AI-driven rally in technology stocks.
Google parent Alphabet announced plans to raise up to 80 billion dollars in stock to fund a major expansion of its AI infrastructure, with Warren Buffett’s Berkshire Hathaway committing 10 billion dollars to the effort.
Anthropic, maker of the Claude chatbot, said it had filed confidentially for an initial public offering that could value the AI group at nearly one trillion dollars.
Wealth Club’s Ms Streeter noted Anthropic’s news comes “hot on the heels” of SpaceX’s filing, adding “there are expectations that OpenAI will also go public pretty soon.”
Ms Streeter warned that high-profile listings could fuel concerns about bubble territory, cautioning that “high-profile IPOs can still become turning points for market sentiment if valuations appear too detached from fundamentals.”
On the FTSE 100, miners Antofagasta, Anglo American, and Glencore led the gainers, rising 6.5%, 4.1%, and 4.6% respectively, as metals prices climbed higher during the session.
British American Tobacco fell 2.5% despite reiterating full-year guidance for group revenue growth of between 3% and 5% for 2026, as analysts flagged multiple headwinds facing the company.
Citigroup analyst Simon Hales cited a combination of a lower global cigarette industry volume estimate, a slower than expected first half recovery in Asia-Pacific, Middle East and Africa, and an 80 basis points share loss in US combustibles as likely negatives for the firm.
BAT also said it expects global cigarette industry volumes to decline by 2.5% in 2026, worse than the previously forecast 2%, adding further pressure on the stock.
Eurozone inflation accelerated to 3.2% annually in May, up from 3.0% in April, according to a flash reading from Eurostat, increasing pressure on the European Central Bank ahead of its meeting next week.
ING Global Head of Macro Carsten Brzeski suggested the data represents “the expected uptick in inflation that will motivate the central bank to decide on an ‘insurance’ hike” at next week’s ECB meeting.