FTSE 100 Climbs as Energy Stocks Surge Amid Middle East Tensions

The FTSE 100 rose 0.7% on Tuesday, led by energy stocks amid mixed signals from the Middle East. UK energy stocks gained 3.2% as oil prices surpassed $100 a barrel. Meanwhile, UK markets brace for interest rate hikes, while miners benefit from steady gold prices despite tumbling retail sales.

On Tuesday, the FTSE 100 index rose by 0.7% as energy stocks led gains, reflecting investor reactions to the ongoing Middle East conflict. This comes as the mid-cap FTSE 250 experienced a 0.5% decline.

Energy stocks in the UK saw a notable increase of 3.2%, driven by a surge in oil prices above $100 a barrel, following Iran's rebuttal of claims made by U.S. President Donald Trump regarding 'productive talks' with Tehran. AJ Bell's head of markets, Dan Coatsworth, highlighted the UK's significant exposure to the energy sector as beneficial to the FTSE 100's performance.

Market expectations have shifted towards three Bank of England rate hikes this year, contrary to earlier predictions of cuts. The BoE's Chief Economist Huw Pill noted that uncertainty over the economic impact of the conflict should not deter measures against inflation.

(With inputs from agencies.)