FTSE 100 Surges 3 Percent on Iran Ceasefire as Traders Price in Peace Premium
London’s FTSE 100 index delivered its sharpest single-day gain of 2026 on 8 April when markets opened to news that the United States had brokered a ceasefire agreement in its conflict with Iran, with the benchmark rising more than three percent to trade above 10,600 points as investors priced in a partial reduction in geopolitical risk.
The rally came after weeks of sustained pressure on UK equities triggered by the outbreak of the US-Iran conflict in late February and the subsequent closure of the Strait of Hormuz, through which approximately a fifth of the world’s oil supply typically flows. The FTSE 100 had climbed to an all-time high of 10,934 points in the final days of February, just as tensions in the Gulf were reaching their peak — a performance driven by the index’s heavy weighting towards energy companies, which initially benefited from the oil price spike.
As the conflict’s economic consequences spread through inflation expectations and corporate earnings forecasts, however, the rally unravelled. By the time the ceasefire was announced, the index had retraced to approximately 10,349 — its lowest level since the previous autumn. The 8 April surge therefore represented a partial but not complete recovery.
Brent crude remained above $100 per barrel even after the ceasefire announcement, reflecting traders’ scepticism about the durability of the agreement and the time required to restore normal shipping through the Strait of Hormuz. Oil analysts noted that even if the ceasefire held, the physical reopening of sea lanes and the restoration of Iranian production would take several weeks, maintaining upward pressure on energy prices in the near term.
UK-listed energy companies, including the major oil majors and several North Sea producers, gave back some of their war-period gains on the ceasefire news but remained substantially above their pre-conflict valuations. Analysts noted that elevated oil prices, while damaging for consumers and the broader economy, continue to generate exceptional earnings for the sector.
