London’s stock markets saw gains on Monday following a temporary cessation of hostilities between the United States and Iran, a development that also contributed to a notable decline in oil prices.

The FTSE 100 index closed 45.52 points higher, or 0.4%, at 10,781.75, while the FTSE 250 advanced by 96.61 points, also 0.4%, ending at 23,898.10. The AIM All-Share index was an exception, slipping 1.29 points, a 0.2% decrease, to 771.69.

The shift came after a weekend pause in attacks; the US held back following nearly two weeks of strikes on Iranian targets. President Donald Trump’s United Nations envoy indicated the president was “giving talks some space,” suggesting a window for diplomacy. Meanwhile, Iran committed to halting retaliatory attacks on neighboring countries, easing tensions affecting Gulf shipping routes and the oil industry.

David Morrison of Trade Nation noted uncertainty about whether the break signals a genuine move toward peace talks or a temporary strategic pause. Despite the improved atmosphere, oil prices remained volatile. Brent crude for September delivery slipped to $89.71 per barrel by Monday afternoon, down from $95.49 late on Friday.

Kathleen Brooks, research director at XTB, remarked that while the immediate tensions have eased, the broader conflict remains unresolved. She cautioned that oil prices might face resistance staying below $85 per barrel at this stage.

The decline in oil prices negatively impacted energy stocks on the London exchanges. BP’s shares dropped 2.6%, and Shell’s fell 0.9%. In the FTSE 250, energy companies were hit harder, with Harbour Energy down 5.7% and Ithaca Energy falling 7.8%.

In contrast, Vodafone was a standout performer in the FTSE 100, advancing 4.8% after raising its full-year earnings guidance. The telecommunications company now anticipates adjusted EBITDA after leases to range between €13 billion and €13.3 billion, an increase from the previous forecast of €11.9 billion to €12.2 billion. Vodafone also reported a 5.2% rise in organic service revenue, with growth recorded across all business segments.

The market response reflected cautious optimism amid uncertainty over the durability of the ceasefire and the future trajectory of US-Iran relations, while corporate earnings updates provided positive momentum for specific sectors.