Western stock markets climbed on Monday as the Middle East conflict entered its fifth week, with investors responding to continued geopolitical developments and energy market pressures.
The Dtse 100 advanced 1.1 per cent during early afternoon trading in London, while Germany's DAX and France's CAC 40 each rose approximately 0.5 per cent.
The pan-European STOXX 600 gained 0.6 per cent.
Across the Atlantic, the S&P 500 and the Dow Jones Industrial Average both increased by 0.9 per cent, while the Nasdaq Composite climbed roughly 0.8 per cent.
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Asian markets, however, moved in the opposite direction overnight amid concerns that elevated crude oil prices could weigh on economic growth.
The weekend saw Iran-backed Houthi rebels in Yemen launch strikes against Israel, contributing to the downturn across Asian bourses.
Sterling fell 0.5 per cent against the dollar to 1.3187.
Meanwhile, US President Donald Trump issued a warning to Tehran on Monday, calling for the immediate reopening of the Strait of Hormuz while outlining ongoing negotiations with what he described as a changed Iranian leadership.
Mr Trump said: "The United States of America is in serious discussions with A NEW, AND MORE REASONABLE, REGIME to end our Military Operations in Iran."
He also warned that failure to reach an agreement could result in the destruction of Iran’s power generation facilities, oil wells and Kharg Island, with desalination plants also potentially targeted.
Experts say the 'playbook is being rewritten' as global markets react to escalating Middle East conflict
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He said these assets had been deliberately left untouched up to this point.
Mr Trump said any such action would be in response to American soldiers killed during what he described as the former regime’s "47 year Reign of Terror".
Iran responded by threatening expanded retaliatory strikes against universities and the residences of American and Israeli officials.
The Pentagon has ordered 10,000 troops trained in seizing and holding territory to deploy to the region.
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Asian stocks however continued to downturn, with Tokyo seeing a two and a half percentage point drop
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Around 3,500 personnel arrived on Friday, including approximately 2,200 marines.
A further 2,200 marines are currently en route.
Thousands of soldiers from the 82nd Airborne Division have also received deployment orders.
Hebe Chen, senior market analyst at Vantage Global Prime, said: "Markets spent a month pricing a short, contained conflict, that wishful optimism has now broken with the Houthis' entry over the weekend.
"The playbook is being rewritten from this week as prolonged war risk becomes increasingly credible."
The 100-mile waterway connects the Persian Gulf to the Gulf of Oman and then the Arabian Sea | GETTYFinance ministers, energy ministers and central bank governors from G7 nations are holding a virtual emergency meeting on Monday, marking the fourth such gathering since the conflict began.
Downing Street said the session aims to hear directly from businesses and explore coordinated responses between Government and the private sector.
Iran’s blockade of the Strait of Hormuz is expected to dominate discussions due to its impact on oil and gas shipments as well as fertiliser and commodity supplies.
Major General Richard Cantrill, the UK’s maritime operations commander, is expected to brief attendees on the regional situation.