London shares ended slightly lower on Monday as energy markets firmed on renewed Middle East tension and UK housing sentiment weakened after softer mortgage data, while Wall Street pushed higher on the other side of the Atlantic, widening the contrast between regional momentum.
The FTSE 100 closed down 0.2% at 10,484.22 and the FTSE 250 fell 0.6% to 23,014.85 as investors balanced geopolitical risk against signs of cooling domestic demand.
Oil moved higher after the US and Iran exchanged strikes over the weekend, with shipping through the Strait of Hormuz disrupted before Washington said a pause had been agreed alongside further talks, while Brent crude rose to $72.85 a barrel from $71.49.
In Europe, the CAC 40 and DAX 40 both finished 0.2% lower, showing a similar cautious tone across the region
In contrast, US equities advanced strongly, with the Dow Jones Industrial Average closing above 52,000 for the first time, helped by gains in technology stocks, while the Nasdaq Composite rose 2% and the S&P 500 added 1.2% as investors rotated back into growth names following last week’s losses, the Dow itself finished up around 0.6% at a record level.
The British pound rallied after Andy Burnham set out his leadership plans in his first major speech since launching a bid that could eventually place him in Downing Street, promising a significant shift in how power is distributed away from Whitehall, while also reaffirming commitment to existing fiscal rules.
Barclays said that stance helped steady market sentiment by easing concerns about an immediate increase in borrowing. The bank also pointed to the absence of detail on cabinet roles, including the chancellorship, suggesting that uncertainty is likely to persist and keep political speculation active in the coming weeks.
UK housing stocks came under pressure after Bank of England figures showed a sharp slowdown in mortgage activity, net mortgage borrowing dropped to £2.9 billion in May from £4.4 billion in April, well below recent averages, while mortgage approvals fell to 56,200 from 66,000, also missing expectations and marking the weakest level since late 2023.
The data weighed heavily on developers, with Persimmon down 2.5% and Barratt Redrow off 2.2% on the FTSE 100, while the FTSE 250 saw sharper declines including Vistry down 4.2%, Taylor Wimpey off 2.5%, Bellway down 2.1% and Berkeley Group falling 2.1%.
Elsewhere, Babcock International led FTSE 100 fallers with a 5.2% drop after reports the UK government has abandoned plans for an advanced warship project it had been competing to develop.
British American Tobacco slipped 0.7% even as it confirmed progress on its Fit2Win restructuring programme, which targets around £600 million in annual cost savings by 2028 and involves changes affecting roughly 5,500 roles globally outside the US.
On the upside, Lion Finance climbed 2.2% after JPMorgan raised its price target to 13,900p from 13,100p following an investor day in Tbilisi, pointing to stronger customer penetration potential in Georgia and Armenia and a higher-quality earnings profile.
Gold weakness also fed into miners, with Fresnillo down 3.0% and Endeavour Mining off 2.9% as the metal eased.
A standout mover in mid caps was Bridgepoint Group, which surged 16% after agreeing a $1.39 billion deal to acquire Kayne Anderson Real Estate, lifting assets under management towards $120 billion and expected to add meaningfully to earnings per share from 2027 onwards as integration progresses.