Friday, April 10

Stocks rally after US and Iran agree two-week ceasefire


The FTSE 100 (^FTSE) and other European markets rallied on Wednesday morning after the US and Iran agreed to a conditional two-week ceasefire.

US president Donald Trump said late on Tuesday that he had agreed to suspend attacks on Iran for two weeks, following conversations with Pakistan.

Trump said in a social media post that “subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks.”

The president added: “This will be a double sided CEASEFIRE!”

Trump said that the US had received a 10-point proposal from Iran and believed “it is a workable basis on which to negotiate”. He said that the two-week ceasefire period would allow an agreement to be “finalized and consummated”.

Trump’s announcement came shortly before the president’s self-imposed deadline of 8pm ET for Iran to re-open the Strait of Hormuz.

Iran’s foreign minister, Abbas Araghchi, later said in a statement that if attacks on Iran are halted then the country’s armed forces would “cease their defensive operations”.

“For a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordination with Iran’s Armed Forces and with due consideration of technical limitations,” he said.

As stocks surged overnight, oil prices plunged, on hopes that crude supply would be able to resume passage through the strait. Brent crude futures (BZ=F) had tumbled more than 13% to $94.67 a barrel at the time of writing on Wednesday morning.

Wealth Club chief investment strategist Susannah Streeter said: “A wave of relief has hit financial markets after threats of a devastating escalation of the war were replaced by a temporary truce.

“The two-week ceasefire is likely to be fraught with uncertainty but for now there are hopes that it will be a precursor to a longer-lasting agreement.”

Here’s how markets are faring on Wednesday morning:

  • London’s benchmark index (^FTSE) jumped 2.3% in early European trading

  • Germany’s DAX (^GDAXI) soared 4.7% and the CAC (^FCHI) in Paris was up 4%

  • The pan-European STOXX 600 (^STOXX) was 3.6% in the green

  • In the US, S&P 500 futures (ES=F) leapt 2.5%, while those on the tech-heavy Nasdaq 100 (NQ=F) rocketed up 3.3%. Dow Jones Industrial Average futures (YM=F) jumped 2.4%

  • The pound jumped nearly 1% against the US dollar (GBPUSD=X) to $1.3424

Follow along for updates throughout the day:

LIVE 3 updates

  • Vicky McKeever

    Shell shares tumble 6%

    Shares in Shell (SHEL.L) sunk % on Wednesday morning, as oil prices slumped and the company cut its gas production outlook, citing the impact of the Middle East conflict.

    Shell said in a trading update, published Wednesday that it now expected integrated gas production to be between 880,000 to 920,000 barrels of oil equivalent per day (boe/d) for the first quarter. That’s down from its previous expectation of 920,000 to 980,000 boe/d.

    The company said it expected trading and optimisation for its chemicals and products business to be “significantly higher” than in the fourth quarter.

    Dan Coatsworth, head of markets at AJ Bell (AJB.L), said: “The sheer volatility in commodity markets is reflected in wild swings in Shell’s working capital and, for all the benefit the company might enjoy from elevated energy markets, it comes with complications and headaches too.

    “To set itself on a sustainable path, Shell needs to look through the short-term noise and work out how it will deliver growth over the long term.”

  • Vicky McKeever

    UK house prices dip

    UK house prices fell by 0.5% in March, bringing the average cost of a home to £299,677, according to the latest data from Halifax.

    This followed a month-on-month gain of 0.3% in February, with the annual rate of house price growth also slowing in March to 0.8% from the 1.2% increase recorded in the previous month.

    Amanda Bryden, head of mortgages at Halifax, said: “The recent slowdown in the housing market reflects the wide uncertainty regarding the conflict in the Middle East.

    “Concerns about higher energy prices have pushed up inflation expectations, which in turn led to a rise in mortgage rates, reducing confidence that interest rates will be cut this year and dampening the initial momentum in the market seen at the start of the year.”

    On a regional level, Northern Ireland continued to lead house price growth across the UK, with the average cost of a home up 8.7% over the past year to £224,809.

    In England, the North East saw prices rise 5% over the year to £184,119, while the cost of an average home in the South East fell 1.9% year‑on‑year to £383,573. In London, average house prices fell 1.2% year-on-year to £536,751

  • Vicky McKeever

    Good morning!

    Welcome back to our markets live blog. As usual we will be taking a deep dive into what’s moving markets, and what’s happening across the global economy.

    Stay tuned for updates throughout the day!

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