FTSE 250 Nears 3-Month High as US, Iran Signal Progress

UK stocks rose in London on Tuesday as investors returned from a long holiday weekend. The mid-cap FTSE 250 reached its highest level since March 3, climbing about 0.9% and setting up a fourth consecutive session of gains. The blue-chip FTSE 100 rose 0.6% to 10,533.50 at 1020 GMT, a one-month high during the session.

The gains followed signals of progress between the United States and Iran on a memorandum that could pause hostilities and reopen shipping through the Strait of Hormuz. Market participants reacted to reports that Washington and Tehran had made headway on terms that might pause the conflict.

Financial and mining stocks were among the strongest contributors to the FTSE 100’s advance. Major lenders including HSBC, Barclays and Lloyds provided significant support. Miners moved higher as metals prices firmed, with Rio Tinto and Glencore each up around 1%.

Energy shares slipped after crude prices eased on hopes of reduced geopolitical risk. BP fell about 1% and Shell slipped roughly 0.5%.

Domestic economic data also influenced sentiment. The FTSE 100 had ended a four-week losing streak on Friday after softer readings reduced expectations for a near-term Bank of England rate increase. A recent report showed British shop price inflation accelerated in May, partly driven by disruption and higher energy costs linked to the wider conflict.

Among individual stocks, Kingfisher rose nearly 4% after it reiterated its full-year profit outlook despite a decline in first-quarter underlying sales. Melrose Industries fell about 4% after an overheating chemical tank at its GKN Garden Grove facility in California triggered an emergency response and evacuations over the weekend.

Senator Marco Rubio cautioned negotiations could ‘take a few days’ following recent US strikes in southern Iran, highlighting that a timeline for a formal deal remained unclear. The reported memorandum, if finalized, could reopen key shipping lanes through the Strait of Hormuz.

Traders are watching further developments in the US-Iran talks and upcoming economic releases for market direction, with inflation data remaining a focus.