European stock markets hit record high and oil price falls to three-month low after US-Iran peace deal – business live

Shares in Fox are also sliding, as Wall Street digests its $22bn takeover of streaming service Roku.

Fox Corporation is leading the fallers on the S&P 500, down around 16%.

The FT reckons investors are spooked at the cost of this aggressive bet on the future of streaming live sports and news…

While many US stocks are rallying, energy producers' shares are sliding.

Chevron (-3.15%) are leading the fallers on the Dow Jones Industrial average, while Exxon Mobile are down 3.7%.

That tracks the fall in the US oil price, below $80 a barrel earlier today.

Back in the UK, engineering firm Rolls-Royce has secured two important agreements involving its new small nuclear reactors.

Swedish nuclear development company Videberg Kraft has chosen Rolls-Royce to supply three Small Modular Reactors (SMRs) on the Värö peninsula, on Sweden's west coast.

Videberg Kraft say:

The Videberg Project will build Sweden's first new nuclear power plant in more than 40 years. It will significantly strengthen the Swedish energy system by adding 1,500 MWe of clean baseload capacity – around 6 percent of Sweden's annual power consumption – for more than 60 years, supporting industries and households in southern Sweden while enhancing energy security.

This comes a day after the UK and Japan agreed to co-operate on advanced nuclear technologies, under which Rolls-Royce will work with the United Kingdom National Nuclear Laboratory (UKNNL) and Japan Atomic Energy Agency (JAEA), to “accelerate the introduction of advanced nuclear technologies in the UK.â€

Boom! The US Dow Jones industrial average has hit a record high in early trading, as Wall Street jumps.

Relief over the US-Iran peace deal has pushed the index of 30 large US companies to a new peak of 51,857 points, over the previous record peak set in early June.

Aerospace manufacturer Boeing (+4%) is leading the risers, followed by construction equipment maker Caterpillar (+3.6%), and Amazon (+3.3%)

The Russell 2000 index of small US companies has also hit a record high, up 1.5%. This follows gains in European markets, which hit their own record high this morning.

“Peace optimism†is helping Wall Street to rally, says Neil Wilson, Saxo UK investor strategist, who explains:

Stocks soared and oil prices slid after the US and Iran agreed a peace deal to reopen the Strait of Hormuz.

“Ships of the World, start your engines. Let the oil flow!†President Trump posted. Iran confirmed the text of a memorandum of understanding had been finalised and said the war would end “permanently and immediately on all frontsâ€.

The two countries will sign the deal in a few days, in Switzerland, after the G7 leaders conference in France this week. The deal is seeing investors take some geopolitical risk premia off the table.

SpaceX's shares are rallying on its second day as a listed company.

After jumping 19% on Friday, SpaceX are up another 5.5% in early trading, as excitement over the company's entry onto the stock market lingers.

This pushes its valuation further over $2trn, and confirms Elon Musk's status as a trillionaire, even though SpaceX is loss-making, and floated at a hefty valuation of 92 times last year's revenues.

Wall Street's main indexes have jumped at the start of trading, as New York traders welcome the news that Washington and Tehran reached a preliminary agreement to end the Middle East conflict and reopen the Strait of Hormuz.

The Dow Jones Industrial Average has climbed by 642 points, or 1.25%, to 51,844 points.

The broader S&P 500 is up 1.5%, while the Nasdaq Composite has climbed by 2.25%.

Deutsche Bank's George Saravelos has identified four currencies that should benefit once super-tankers start moving through the Strait of Hormuz full of oil again.

• Swedish krona: It is high beta to the euro, an energy importer, and pro-cyclical to global growth. The domestic economy has been outperforming most economies in Europe and yet the currency has been one of the weakest in developed markets since March.

• South African rand: An unwind in oil risk premia, potential rebound in gold, high real-rate buffer and still-improving domestic backdrop should all help.

• Chilean peso: The currency has been one of the biggest under-performers versus its aggregate terms of trade and positioning is short. With oil receding and copper remaining elevated, the balance of payments should materially improve.

• Indian rupee: High sensitivity to oil prices and a market that is positioned short. RBI policy measures will support both near-term inflows and longer-term structural demand.

The disruption to fertiliser supplies caused by the Iran war may not be reversed quickly, expert warn.

The Middle East is a key supplier of nitrogen-based fertilisers such as urea, and shortages since the conflict began have pushed up food prices.

But the bad news for farmers (and ultimately consumers) is that fertilizer cargoes are unlikely to be among the first shipments to move.

Alexis Ellender, senior dry bulk lead at Kpler, says (via Bloomberg):

“When it comes to moving ships through the Strait of Hormuz, it's going to be oil tankers and LNG carriers that are top of the list once we get towards a more normal flow of traffic.

“Fertilizer is not as high a priority.â€

Here's our news story on the drop in the oil price today:

European gas prices have dropped sharply today, on hopes that supplies from the Middle East will resume soon.

Despite warnings that it will take time for traffic through the strait of Hormuz to resume, wholesale gas prices have dropped to their lowest in over a month.

The month-ahead UK gas contract is down 7% at 103.9p per therm, its lowest level since 7 May, as traders react to the US-Iran peace deal.

The continental gas price has dropped by 6.4%, to €43.785 per megawatt hour.

That will make it cheaper for governments to rebuilt their liquified natural gas (LNG) reserves ahead of next winter.

Analysts at ING say:

Europe still needs to replenish its gas storage, which sits well below the seasonal average – at a time when Asia will increasingly compete with Europe for LNG supplies.