Key facts
- Oil prices fell as Donald Trump stated Iran has a 'last chance' for peace.
- Brent crude dropped over five percent to below $83 per barrel.
- Iran has indicated no immediate plans for peace talks.
- The FTSE 100 closed slightly lower on Monday.
- Housebuilder stocks gained on peace deal optimism.
The FTSE 100 is poised for a jump on Tuesday morning, driven by growing optimism for a potential peace deal between the US and Iran. Oil prices, however, drifted lower on Monday after President Donald Trump called off planned strikes against Iran, though progress towards a finalized peace agreement remains stalled due to clashes between the leaderships.
Brent crude, the international benchmark, tumbled over five percent on Monday to settle below $83 per barrel. This decline followed Trump's assertion that a peace deal was 'imminent.' However, the Iranian regime quickly dampened these hopes, stating it had 'no plan to receive a delegation or send an Iranian one' in the near future.
Later on Monday, Trump insisted that peace talks were indeed progressing, stating they were 'going on right now' and would 'go quickly, one way or another.' He added, 'This is the last chance for them to sign a good document.'
Deutsche Bank analyst Jim Reid noted that 'hopes have risen over the weekend of a diplomatic off-ramp' between the US and Iran. Conversely, Patrick Munnelly, market strategist at Tickmill Group, cautioned that there was 'still a meaningful gap between talks resuming and the Strait of Hormuz fully reopening.'
On Monday, the FTSE 100 index closed 10 points lower at 10,857, experiencing a shaky open and some afternoon gains before slipping in late trading. Among the biggest gainers on the London Stock Exchange were housebuilders such as Barratt, Redrow, and Vistry, which rallied on the prospect of a peace deal and rumors of the government potentially reviving the Help to Buy scheme.