London stocks inch up as US-Iran pause, earnings lift risk appetite

July 27 (Reuters) - London's FTSE 100 edged higher on Monday as a pause in U.S.-Iran hostilities over the weekend sent oil prices lower and boosted risk sentiment globally, while a decline in energy stocks capped gains.

The blue-chip FTSE 100 index rose 0.4% to 10,781.75 points, while the midcap FTSE 250 also climbed 0.6%.

• The U.S. paused its attacks on Iran over the weekend, and a senior Iranian official told Reuters Tehran would do the same if the U.S. bombing pause holds.

• Oil prices tumbled more than 7% to about $89.42 a barrel, dragging British energy stocks 1.5% lower for their biggest one-day drop since the beginning of the month. [O/R]

• Travel and leisure stocks were among the biggest gainers, with a 1.7% advance. IAG gained 1.5% and Premier Inn owner Whitbread added 1%.

• Meanwhile, quarterly earnings also gained momentum. The FTSE 350 telecom services provider index gained 3.9%, helped by a 4.8% rise in Vodafone after it raised its forecast to reflect its Safaricom deal, and said it expected to deliver results at the upper end of its new range.

• Pharma stocks added 1.8%, with AstraZeneca <AZN.L> rising 1.7% after it backed its annual and long-term forecasts and topped second-quarter profit expectations.

• Results from U.S. Big Tech companies, including Microsoft and Apple, will also be crucial to gauge whether the AI-driven rally is sustainable, which could set the tone for broader markets.

• Policy statements from the U.S. Federal Reserve and the Bank of England will be watched later this week for hints on the banks' next likely moves.

• Markets are pricing in at least one 25-basis-point rate increase in both economies, with an over 60% chance of a second in the U.S. and over 40% in UK, according to LSEG-compiled data.

• Vesuvius shares slid about 12.8% to the bottom of the FTSE 250 after a dip in its profit for the first half of the year.

(Reporting by Purvi Agarwal and Niket Nishant in Bengaluru; Editing by Vijay Kishore and Tasim Zahid)