FTSE 100 climbs as US readies Iran sanctions and bond buyback plan

FTSE 100 edged higher on Monday afternoon, shedding an early slump to finish the session in positive territory. Gains were led by Airtel Africa, Intercontinental Hotels Group and other mid‑cap names, while Autotrader and Melrose Industries weighed on the broader market.

US policy moves dominate investor focus

Across the Atlantic, Scott Bessent of the US Treasury is set to announce a dual strategy: a plan to double the pace of Treasury bond buybacks and a fresh package of sanctions targeting Iran. The Treasury official described the sanctions as an “economic D‑Day” in the United States’ ongoing pressure campaign.

Oil market reaction and broader implications

"If the countries surrounding Iran join the Americans in their economic war, not a drop of oil will leave the Persian Gulf and the Strait of Hormuz, and we will also target other oil export routes from the Persian Gulf," said Mohsen Rezaei, Iran’s security chief.

Oil prices slipped modestly, with Brent crude falling about one per cent to just above $93 a barrel. The dip pressured energy majors Shell and BP, whose shares mirrored the broader move in the sector.

Outlook for markets

Richard Hunter, head of markets at Interactive Investor, noted that the UK market is playing second fiddle to the US agenda, resulting in a relatively flat FTSE with muted trading volumes. Domestically, the government announced a review of business rates for pubs and hotels, a move championed by Andy Burnham to support high streets.

Looking ahead, traders will watch for the Treasury’s bond‑buyback details and the exact scope of the Iran sanctions. A successful buyback could buoy US Treasury yields, while aggressive sanctions risk further oil price volatility and could spill over into broader market sentiment.

Investors should therefore prepare for a potentially choppy week, balancing the upside from US monetary actions against the downside from geopolitical tension in the Middle East.