Finance
FTSE 100 Rallies to One-Month High Following US-Iran Ceasefire Agreement
Published by Global Banking & Finance Review®
Posted on April 8, 2026
2 min readLast updated: April 8, 2026
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Following a U.S.–Iran two‑week ceasefire agreement and imminent reopening of the Strait of Hormuz, the FTSE 100 surged to a one‑month high—buoyed by falling oil prices and global markets rallying on renewed supply hopes.
FTSE 100 Rallies to One-Month High After US-Iran Ceasefire Announcement
Market Reaction and Key Developments
April 8 (Reuters) - The UK's FTSE 100 rallied to one-month highs on Wednesday after an agreement between the United States and Iran on a two-week ceasefire, sending global stocks surging and oil prices sharply lower.
U.S. President Donald Trump announced the agreement late on Tuesday, just two hours before a deadline he had set for Iran to open the blockaded Strait of Hormuz or face the destruction of its "whole civilisation".
The last-minute turnaround helped lift sentiment as traders anticipated a revival of shipping through the strait, which handles about one-fifth of global oil and liquefied natural gas shipments.
The blue-chip FTSE 100 index rose 2.9% by 1042 GMT, touching its highest level since March 3, while the midcap FTSE 250 soared 4.5% to its highest since March 10.
Sector Performance and Oil Market Impact
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Oil Companies and Energy Sector
Heavyweight oil companies, including BP and Shell, dropped more than 5% each, tracking a near 15% plunge in crude prices. [O/R]
Shell's Outlook and Earnings Impact
Shell cut its first-quarter gas production outlook while signalling a surge in oil trading profit and a dent to short-term liquidity, offering an early glance into the whiplash effect of the Middle East conflict on oil majors' earnings.
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Other Major Sectors
All the other major FTSE 350 subsectors rose, led by rate-sensitive homebuilders, banks and travel companies.
Economic Indicators and Policy Expectations
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Interest Rate Outlook
Investors priced in around 35 basis points of interest rate hikes by the Bank of England this year - or one and two quarter-point increases - compared with 63 bps on Tuesday.
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Housing Market Update
British house prices slid unexpectedly last month as economic uncertainty stemming from the Iran war hurt buyer demand, according to mortgage lender Halifax.
Political Developments and Corporate News
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Diplomatic Efforts
British Prime Minister Keir Starmer will travel to the Gulf on Wednesday to hold talks with regional leaders to try to ensure the Strait of Hormuz opens permanently after a U.S.-Iran ceasefire, his office said.
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Corporate Activity
Gamma Communications jumped almost 14% after the British telecom firm said it is in preliminary discussions with a number of parties for a potential sale.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Vijay Kishore)
Key Takeaways
- •The FTSE 100 rose approximately 2.9% to its highest level since March 3, amid oil’s roughly 13–16% plunge on ceasefire news.
- •Traders anticipate revived shipping through the Strait of Hormuz, easing supply concerns; energy majors like BP and Shell dropped over 5%.
- •Gamma Communications soared nearly 14% after confirming early-stage takeover discussions; other sectors like homebuilders, banks and travel also advanced.
Frequently Asked Questions about FTSE 100 rallies to one-month high following US-Iran ceasefire agreement
1Why did the FTSE 100 rally to a one-month high?
The FTSE 100 rallied due to a US-Iran ceasefire agreement, easing global tensions and boosting market sentiment.
2How did the US-Iran ceasefire affect oil prices?
Oil prices dropped sharply by nearly 15% following the ceasefire, as concerns over supply disruptions eased.
3Which sectors contributed to the FTSE 100's rise?
Rate-sensitive homebuilders, banks, and travel companies led gains while oil majors like BP and Shell declined.
4What was the impact on British house prices?
British house prices unexpectedly slid last month as economic uncertainty from the Iran conflict hurt demand.
5What was the Bank of England's expected interest rate move?
Investors priced in about 35 basis points of interest rate hikes by the Bank of England this year.