London’s FTSE 100 gained on Monday as a pause in US-Iran hostilities over the weekend sent oil prices lower and improved risk sentiment across global markets.
However, a sharp decline in energy stocks limited the broader advance.
The blue-chip FTSE 100 index rose 0.4% to 10,781 points by 0922 GMT.
The mid-cap FTSE 250 also moved higher, gaining 0.6%.
The market move came after the United States paused its attacks on Iran over the weekend.
The developments eased concerns over further escalation and contributed to a sharp decline in oil prices.
Oil prices fell more than 6% to about $90 a barrel.
The drop in oil prices weighed heavily on British energy stocks.
The sector fell 2.5% and was on track for its biggest one-day decline since the beginning of the month.
Travel and leisure stocks lead gains
Travel and leisure stocks were among the strongest performers in London’s market on Monday.
The sector gained 2.3% as lower oil prices supported a broader improvement in risk sentiment.
IAG shares rose 2.8%, while Whitbread, the owner of Premier Inn, added 2%.
The gains in travel-related stocks came as investors responded positively to the easing in geopolitical tensions and the decline in oil prices.
The broader market rally, however, remained partly restrained by weakness in the energy sector.
Vodafone boosts telecom sector
Quarterly earnings also helped drive gains in the UK market, with investors focusing on company updates and forecasts.
The FTSE 350 telecom services provider index gained 3%.
Vodafone was among the major contributors to the sector’s performance, with its shares rising 4.5%.
The company raised its forecast to reflect its Safaricom deal.
Vodafone also said it expected to deliver results at the upper end of its new range.
The stronger performance from Vodafone helped lift the wider telecom sector and contributed to the FTSE 100’s advance during the session.
Pharma shares rise on AstraZeneca results
Pharmaceutical stocks also moved higher, with the sector gaining 1.3%.
AstraZeneca shares rose 1.6% after the company backed its annual and long-term forecasts.
The pharmaceutical group also exceeded second-quarter profit expectations.
The results provided additional support to the broader UK market as investors assessed corporate earnings alongside developments in global markets.
Big tech earnings and central banks in focus
Investors are also looking ahead to results from major US technology companies, including Microsoft and Apple.
Their earnings are expected to indicate whether the artificial intelligence-driven market rally can continue.
The performance of major technology companies could influence the direction of broader markets as investors assess the sustainability of the recent AI-led gains.
Attention will also turn to policy statements from the US Federal Reserve and the Bank of England later in the week.
Investors will look for indications of the central banks’ next likely policy moves.
According to LSEG-compiled data, markets are pricing in at least one 25-basis-point rate increase in both economies.
The data also showed more than a 60% chance of a second rate increase in the US and more than a 40% chance of another increase in the UK.
Vesuvius shares slide after profit decline
Elsewhere in the FTSE 250, Vesuvius shares fell about 10%, making the company the biggest decliner on the mid-cap index.
The shares dropped after the company reported a decline in profit for the first half of the year.
The sharp fall in Vesuvius shares stood in contrast to the broader gains across UK markets.
While the FTSE 100 and FTSE 250 advanced, investors continued to respond to company-specific earnings updates, movements in oil prices and expectations around monetary policy.
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