The FTSE 100 finished lower on Monday after reports emerged that Iran had suspended indirect negotiations with the United States, sparking fresh concerns over Middle East stability and sent oil prices sharply higher.
London’s blue-chip index closed down 0.7% at 10,338.95, while the FTSE 250 also retreated 0.8% to 23,245.78 as investors weighed the potential impact of escalating tensions on global energy supplies.
According to Iranian news agency Tasnim, Tehran halted communications with mediators in response to Israel’s expanding military operations in Lebanon. The report followed renewed exchanges of strikes between Iranian and US forces despite a ceasefire that had been in place for several weeks.
Tasnim said Iran’s negotiating team had suspended discussions and the exchange of messages through intermediaries, adding that any return to talks would depend on Israel ending military operations in Gaza and Lebanon as well as withdrawing completely from Lebanese territory.
The agency also reported that Iran would continue blocking the Strait of Hormuz and could widen pressure by activating other fronts, including the Bab al-Mandab Strait at the entrance to the Red Sea.
As a result, Brent crude for futures climbed to $97.22 a barrel, pushing oil majors higher despite the broader market decline.
BP gained 2.7% and Shell rose 2.5%, making both among the strongest performers on the FTSE 100 as investors positioned for higher crude prices.
Takeover activity drove several notable moves across the FTSE 250.
Bluefield Solar Income Fund surged 16% after agreeing to a £548 million cash acquisition by Drax, a deal that values the company at an enterprise value of approximately £1.08 billion. Shareholders will receive 92.57p per share in cash and retain the second interim dividend of 2.25p per share due to be paid around 15 June.
Applied Nutrition advanced 12% after upgrading full-year revenue guidance, announcing a partnership with Mondelez International and revealing the acquisition of US manufacturer Nutrablend for $16 million. The company now expects annual revenue of around £148 million, comfortably ahead of market forecasts and representing growth of 38% from the previous year. Nutrablend’s Buffalo facility is capable of supporting up to $300 million in annual revenue.
easyJet jumped 10% after asset manager Castlelake confirmed it was considering a possible offer for the airline. Castlelake said any proposal would be worth at least 403.23p per share.
easyJet responded by stating it had received no approach and described the timing as highly opportunistic given what it sees as a temporarily depressed valuation. The airline also highlighted significant regulatory and financing hurdles that could complicate any transaction.
Among the day’s biggest fallers, ME Group International tumbled 27% after warning that softer trading conditions had prompted a more cautious outlook. The company pointed to weaker consumer confidence linked to the Middle East conflict, particularly affecting its French photobooth and laundry operations. It now expects 2026 pretax profit of between £69 million and £74 million, below the £78.2 million achieved last year.
Wise also came under heavy pressure, falling over 10% after Belgian prosecutors confirmed an investigation into suspected money laundering involving accounts on the company’s platform.
The probe reportedly focuses on Wise’s European operations rather than its UK business and follows allegations that around €500 million of suspicious transactions passed through accounts across 30 European countries.
Wise said it was cooperating with authorities and that no specific findings had been communicated to the company.