The FTSE 100 index closed 0.8% higher on Wednesday, as investors' optimism about a potential US-Iran nuclear deal lifted market sentiment.
According to a Bloomberg report, the deal could be announced as early as this week, which has sent shockwaves of positivity throughout the global markets.
The UK's blue-chip index has been volatile in recent weeks, driven by concerns over the ongoing pandemic and the UK's economic recovery. However, Wednesday's gain suggests that investors are starting to regain confidence.
Analysts point out that the US-Iran deal could have significant implications for the global economy, particularly in the energy sector. If the deal is successful, it could lead to a surge in oil prices, which could have a positive impact on oil-producing companies listed on the FTSE 100.
However, others caution that market volatility could remain high in the coming days and weeks, particularly if the deal is not ratified or if the UK's economic recovery falters.