The FTSE 100 struggled for momentum on Monday as renewed tensions between the US and Iran pushed oil prices higher, leaving London’s leading index almost unchanged after closing just one point higher.
The FTSE 100 ended the session flat, while the FTSE 250 edged up 0.1% as investors assessed developments in the Middle East.
Oil prices climbed after further hostilities between Washington and Tehran followed last week’s exchange of fire, with the US striking Iran for a second consecutive day and Iran retaliating against American allies in the Gulf.
The dispute has centred on the Strait of Hormuz, one of the world’s most important oil shipping routes, with US President Donald Trump stating that the waterway would remain open while announcing plans to reinstate a blockade on Iranian vessels. Trump said cargo passing through the strait would face a charge of 20% to cover the costs of maintaining security, posting on Truth Social that “The Hormuz Strait is OPEN” while confirming the blockade measures.
Rising crude prices supported London’s major energy companies, with BP climbing 4.6% and Shell gaining 2.3%. Shell also announced the $1.8 billion sale of Solenergi Power, including the Sprng Energy group of companies, to Aditya Birla Renewables.
Housebuilders were among the stronger performers despite higher bond yields, after reports that incoming prime minister Andy Burnham is considering bringing back the Help to Buy scheme when he takes office next week. The scheme, introduced by former chancellor George Osborne in 2013, was designed to support the housing market following the impact of the global financial crisis.
Persimmon rose 2.9% and Barratt Redrow added 1.5% on the FTSE 100, while Taylor Wimpey gained 2.1% on the FTSE 250.
Mining and technology stocks faced pressure, with lower gold prices weighing on Fresnillo and Endeavour Mining, which fell 2.9% and 2.2% respectively. Technology-focused investors also saw declines, with Polar Capital Technology Trust down 1.8% and Scottish Mortgage Investment Trust falling 2.6%.
Recruitment firms led gains on the FTSE 250 after stronger-than-expected updates improved sentiment towards the sector. PageGroup surged 20% after reporting a “good performance” in the second quarter, helped by growth across Asia Pacific and the Americas. Gross profit increased 1.3% year-on-year to £197.6 million, although it fell 0.2% at constant currency.
Analysts at Panmure Liberum noted that the results compared favourably with expectations for a 5% constant currency decline, although some investors may remain cautious after PageGroup shares reached a 23-year low last month.
Hays also benefited from renewed optimism following its recent trading update, with shares rising 14%, while Watches Of Switzerland Group climbed 4.2% ahead of its trading statement after reports it had held discussions over potential private takeover offers.
ME Group International advanced 9.3% after reporting that trading in May and June returned to more normal seasonal patterns following a weaker April, while Oxford Nanopore dropped 3.6% after warning that first-half revenue would fall below forecasts.
Across Europe, France’s CAC 40 rose 0.3% and Germany’s DAX 40 gained 0.2%. US markets moved lower as investors reacted to the escalation between Washington and Tehran and renewed pressure on artificial intelligence-related shares.
The Dow Jones Industrial Average fell 0.3%, while the S&P 500 declined 0.8% and the Nasdaq Composite dropped 1.6%. Semiconductor stocks were among the biggest fallers, with newly listed SK Hynix shares sliding 15% in South Korea and Samsung Electronics falling 11%.
US-listed chipmakers also suffered losses, with ARM down 5.1%, Marvell Technology lower by 4.8% and Micron Technology falling 4.0% as investors reassessed valuations across the artificial intelligence sector.