April 8 (Reuters) - The UK's FTSE 100 rallied to a more

than one-month high on Wednesday after an agreement between the

United States and Iran on a two-week ceasefire sent global

stocks surging and oil prices sharply lower.

U.S. President Donald Trump announced the agreement late on

Tuesday, just two hours before a deadline he had set for Iran to

open the blockaded Strait of Hormuz or face the destruction of

its "whole civilisation".

The last-minute turnaround helped lift sentiment as traders

anticipated a revival of shipping through the strait, which

handles about one-fifth of global oil and liquefied natural gas

shipments.

But even as Israel and the United States paused their attacks on

Iran, Israel escalated its parallel war in Lebanon.

The blue-chip FTSE 100 index closed up 2.5% at

10,608.9 points, its highest end-of-day level since March 2,

while the midcap FTSE 250 rose 4.1% to its highest since

March 11.

* Heavyweight oil companies, including BP and Shell

, dropped 5.8% and 4.7%, respectively, tracking a

double-digit plunge in crude prices .

* Shell cut its first-quarter gas production outlook

while signalling a surge in oil trading profit and a dent to

short-term liquidity, offering an early glance into the whiplash

effect of the Middle East conflict on oil majors' earnings.

* All the other major FTSE 350 subsectors rose, led by

rate-sensitive home builders, banks

and travel companies.

* Investors priced in around 32 basis points of tightening

by the Bank of England this year compared with 63 bps on

Tuesday.

* British house prices fell unexpectedly last month as

economic uncertainty stemming from the Iran war hurt buyer

demand, according to mortgage lender Halifax.

* British Prime Minister Keir Starmer will travel to the

Gulf on Wednesday to hold talks with regional leaders to try to

ensure the Strait of Hormuz opens permanently, his office said.

* British telecoms firm Gamma Communications ( GAMCF ) jumped

more than 16% after it said it was in preliminary discussions

with a number of parties for a potential sale.