Global stocks diverged Tuesday as investors weighed first-quarter corporate earnings alongside uncertainty over the fragile US-Iran ceasefire.

Oil prices pulled back but held on to most of Monday’s sharp gains, after the two sides traded fire as they vie for control of the crucial Strait of Hormuz.

London’s FTSE 100 index fell one per cent as traders returned from the UK bank holiday. The index was weighed by a sharp drop to the share price of banking giant HSBC, whose first-quarter earnings missed expectations as profits were hit by a surprise $400 million fraud-related charge and economic risks from the Middle East crisis.

Markets fared better elsewhere in Europe, with Paris up 0.5 per cent and Frankfurt advancing more than one per cent in midday deals.

Italian bank Unicredit jumped around six per cent in Milan after it reported a sharp rise in first-quarter net profit.

‘First-quarter corporate earnings have largely been robust so far which has helped to sustain global equities despite the uncertain backdrop,’ said AJ Bell head of markets Dan Coatsworth.

‘However, the longer the situation goes on without any sign of a lasting resolution, the harder it will be for investors to remain positive,’ he added.

International oil benchmark Brent North Sea fell around one per cent to about $113 per barrel after sharp gains the previous day.

Crude prices surged Monday after the US military said it hit six Iranian boats threatening commercial shipping and its forces repelled missile and drones.

The United Arab Emirates, meanwhile, said it was targeted by Iranian strikes, including one on its vital Fujairah energy hub.

‘Global market sentiment has made a cautious start to the week, with renewed attacks in the Gulf casting doubt on the state of the four-week-old ceasefire,’ said Jim Reid, managing director at Deutsche Bank.

Fears that the ceasefire could fall apart weighed on Asian equities, with Hong Kong, Singapore, Mumbai, Bangkok, Manila and Wellington all down.

Sydney also retreated as the Australian central bank hiked interest rates for the third straight meeting, citing rising energy prices.

Tokyo and Shanghai were closed for holidays.

The losses followed a drop on Wall Street — where the S&P 500 and Nasdaq came off record highs — and came after a healthy rally fuelled by fresh interest in all things linked to artificial intelligence.