FTSE 100 Closes at 10,385, Up 0.73% on Iran-Israel Pause; Brent Pulls Back to $96.80
The FTSE 100 closed at 10,385 on Tuesday, up 0.73% on the day, as the bilateral Iran-Israel pause partially reversed Monday’s risk-off trade. Brent crude fell 3.7% to $96.80 a barrel from Monday’s $100.50 close. UK 10-year gilt yields eased to 5.03%; sterling firmed to $1.3410. The VIX is down 9.5% to 26.70. Defence stocks BAE Systems, Babcock and Melrose pulled back from Monday’s highs; oil majors BP and Shell led the FTSE losers on the Brent pullback.
The Tuesday close reflects the structural Iran-pause-with-conditional-reprisal binary. If Israeli Lebanon operations halt and Iran maintains the pause, Brent likely eases to $90-95 within 48-72 hours and the FTSE could recover toward 10,420. If Israeli Lebanon operations continue and Iran follows through on the “crushing reprisal” warning, Brent likely tests $105-110 and the FTSE falls toward the 10,250 next support level. The 5.03% gilt yield is right at the 5% line; the Bank of England MPC’s next decision later this month is the binding macro variable. The Ofgem October price-cap reset depends on Brent staying in the $88-95 range through mid-summer; the current trajectory still points to a meaningful price-cap rise.