London’s blue-chip stocks closed lower on Monday as rising oil prices and uncertainty over Middle East peace talks weighed on investor sentiment.
The FTSE 100 ended the session down 38.59 points, or 0.4%, at 10,862.50. The FTSE 250 declined 110.32 points, or 0.4%, to 24,744.54, while the AIM All-Share edged up 0.1% to 796.38.
Oil prices rise as Hormuz tensions continue
Crude oil prices extended their recent gains after Iran’s Revolutionary Guard Corps warned that it would not reopen the Strait of Hormuz until Washington met demands including compensation for war-related damages.
Brent crude for October delivery climbed to $86.35 per barrel on Monday, up from $83.40 late on Friday.
US President Donald Trump played down expectations of an immediate reopening of the strategic waterway, saying the US was only “semi-negotiating” with Iran while monitoring the country’s economic situation.
AJ Bell investment director Russ Mould said the Iran conflict remains a “key source of concern for markets”, with a lasting resolution appearing unlikely in the near term.
Markets await US inflation data
Investor attention is now focused on Wednesday’s US inflation figures following weaker-than-expected employment data released last week.
The jobs report reduced expectations that the US Federal Reserve would raise interest rates soon to combat persistent inflation. Before the September meeting, policymakers will receive another consumer price reading and additional labour market data, while the Federal Reserve’s Jackson Hole Symposium will also take place.
The pound traded at $1.3522, rising from $1.3498 at Friday’s market close. Sterling also strengthened against the euro, reaching €1.1708 from €1.1677.
The yield on the US 10-year Treasury note increased to 4.70% from 4.65%, while the 30-year Treasury yield rose to 5.24%.
European and US markets show mixed performance
European markets traded unevenly on Monday. Paris’ CAC 40 gained 0.1%, while Frankfurt’s DAX 40 also closed slightly higher.
In New York, trading was mixed. The Dow Jones Industrial Average edged higher, the S&P 500 slipped slightly, and the Nasdaq Composite fell 0.3%.
JPMorgan raised its 2026 target for the S&P 500 to 8,000 from 7,800, citing improving demand and order coverage among major technology companies despite continued high capital spending.
Energy stocks gain while housebuilders struggle
In London, higher oil prices supported energy stocks, with BP rising 1.4% and Shell gaining 0.6%.
Tobacco companies were among the biggest decliners, with British American Tobacco falling 4.4% and Imperial Brands dropping 4.6%.
Legal & General declined 1.6% after Citigroup downgraded the insurer to “sell” from “neutral”, citing a valuation that had become demanding after a 19% gain year-to-date.
Rising bond yields pressured housebuilders, with Persimmon falling 2.0%, Barratt Redrow down 2.5%, and Vistry declining 12% on concerns over supplier credit insurance reductions.
Plus500 reports record revenue growth
Among FTSE 250 companies, Plus500 gained 2.1% after reporting record six-month revenue growth.
The Israel-based trading platform operator said group revenue increased 12% to $462.9 million, while pretax profit rose slightly to $183.2 million in the six months ended June 30.
Gold remains supported by weaker dollar
Gold traded near $4,350.91 per ounce, supported by recent dollar weakness following the release of weak US labour data.
Trade Nation analyst David Morrison noted that gold may need to consolidate after its recent rally before attempting another move higher.
FTSE 100 biggest movers
The strongest FTSE 100 performers included:
- Fresnillo, up 99.0p to 2,963.0p
- Glencore, up 11.7p to 568.7p
- Spirax Group, up 150.0p to 7,650.0p
- Metlen Energy & Metals, up 0.7p to 50.7p
- BP, up 7.4p to 524.6p
The biggest fallers were:
- Coca-Cola HBC, down 236.0p to 4,724.0p
- Imperial Brands, down 127.0p to 2,664.0p
- British American Tobacco, down 193.0p to 4,228.0p
- Vodafone, down 3.7p to 116.8p
- Barratt Redrow, down 8.2p to 315.4p
