US markets largely shrugged off US President Donald Trumps withdrawal from the Iran nuclear deal last night, and the FTSE showed no signs of easing either, opening 0.4 per cent higher at 7,596.65.
Despite a wobble in US markets after Trump announced the US withdrawal, both the Dow Jones and the Nasdaq paired losses to close up, with only the S&P 500 slipping 0.1 per cent.
Asian markets were mixed overnight, with Hong Kongs Hang Seng up 0.2 per cent and Japans Nikkei down 0.4 per cent.
Oil was the most affected by Trumps Iran announcement, with brent crude surging 1.8 per ceant towards $77 per barrel.
Connor Campbell, financial analyst at Spreadex says the gush in oil prices “gave the FTSE the freedom to climb around 30 points, with the index knocking on the door – if, admittedly, quite politely – of 7600, a rough 14 week peak that it has found difficult to break through in the last few sessions.”
Sterling, however, has continued to slip ahead of Thursdays Bank of England meeting, down 0.1 per cent against the greenback.
However, though markets have not been greatly impacted by news of the Iran nuclear deal, analysts warn that volatility may be in store.
Lukman Otunuga, research analyst at FXTM said:
“While it was widely anticipated that Trump would pull out of the Iran agreement, what is likely to leave a lasting impact on the markets is the threat that he would also penalize those who help Iran.
“These overall risks are encouraging traders to price in some new geopolitical risk premium, and his threat can potentially be seen as a blow for U.S allies.
“There is a threat of Trumps stark tone questioning U.S relations with its European allies, especially given that the likes of France and the United Kingdom had appealed for Trump not to withdraw.”