FTSE 100 on Track for Best Month Since Iran Attacks: Market 2026

The FTSE 100 is on track for its best month since the first US attacks on Iran five months ago, with the index poised to finish up about 3.5% at around 10,840 points despite a slight dip in afternoon trading. This resilience comes after a turbulent March that saw the index plummet to a year low below 9,700 points during the height of the Iran conflict.

Investors have shown renewed confidence as geopolitical tensions ease, and the broader European Stoxx 600 index is also up 1.2% this month, recovering from an 8% drop in March. This positive momentum signals a potential turning point for global markets.

FTSE 100 Performance and Market Drivers

The FTSE 100's monthly gain of 3.5% marks a significant recovery, driven by strong performances in energy and financial sectors. The index reached a new record high earlier this morning, reflecting investor optimism despite ongoing uncertainties.

However, the index was down 0.5% after 3pm BST, showing that volatility remains. Analysts attribute the pullback to profit-taking and lingering concerns about interest rates and inflation.

Key Business and Economic News

Several major corporate stories have shaped this week's market narrative. BP has put its North Sea oil and gas business up for sale, ending six decades of production in the basin. Meanwhile, UK petrol prices have hit a new Iran War high, adding financial pressure on households ahead of the summer holidays.

Morrisons reported widened losses of £926 million and cut nearly 5,000 jobs, while Sainsbury's agreed to sell Argos for £120 million to focus on its core food business. Additionally, Great Britain recorded its highest solar power installations in a six-month period since 2011.

Market Outlook and Investor Sentiment

Wall Street is also ending the month on a positive note, with major indices opening higher. The S&P 500 rose 0.54%, the Nasdaq gained 0.92%, and the Dow Jones added 225.88 points, reflecting broad-based optimism.

However, UK house price growth remained dampened in July due to economic uncertainty and cautious buyers during the Iran war, which is typically the peak housebuying season. This suggests that while markets are recovering, the real economy still faces headwinds.

Key Takeaways for Investors

• FTSE 100 is set for its best month since the Iran attacks, up 3.5%.
• Energy sector remains volatile due to BP's North Sea sale and high petrol prices.
• Retail sector faces challenges, with Morrisons losses and Sainsbury's divestment.
• Renewable energy shows growth, with record solar installations in the UK.
• US markets are rallying, indicating global risk-on sentiment.

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