The FTSE 100 retreated on Tuesday after a volatile session, erasing Monday’s 0.8% advance as caution dominated amid uncertainty over efforts to restore energy shipments through the Strait of Hormuz. Brent crude traded close to $100 a barrel. President Donald Trump said he expected the US to reach a deal with Iran after the election, adding that oil flows had increased since the conflict began and that prices were likely to fall sharply once it ends.
Banking stocks weakened, with HSBC down 1.4%, Barclays 0.9% and Lloyds 1.1%. Defence contractors also lost ground, as Rolls-Royce slipped 1.4% and BAE Systems 2.6%. In contrast, Kingfisher jumped 12% after raising its profit guidance on the back of strong momentum at Screwfix, as well as in its Polish and Iberian operations. Smiths Group climbed nearly 8%, supported by higher revenue and improved growth expectations at its John Crane and Flex-Tek divisions.
On the macroeconomic front, a CBI survey showed factory orders at their highest level since July 2023. Meanwhile, government borrowing in August rose to £18.3 billion, exceeding economists’ expectations of £15.5 billion.
