Early market roundup: FTSE 100 declines amid Middle East escalation

London’s blue chip index opened lower on Monday, as sentiment was impacted by a fresh round of hostilities between Israel and Iran.

The FTSE 100 index opened down 28.89 points, 0.3%, at 10,339.16. The FTSE 250 was down 91.74 points, 0.4%, at 22,969.00, and the AIM all-share was down 6.89 points, 0.9%, at 790.38.

The Cboe UK 100 was down 0.5% at 1,025.61, the Cboe UK 250 was 0.3% lower at 19,775.98, and the Cboe small companies was down 0.4% at 18,721.23.

In European equities on Monday, the CAC 40 in Paris was down 0.8%, while the DAX 40 in Frankfurt was 0.7% lower.

Sterling was at $1.3329 on Monday morning, down from $1.3371 at the London equities close on Friday. Against the euro, sterling fell to €1.1569 from €1.1583.

The euro was lower at $1.1517 from $1.1542. Against the yen, the dollar was a little lower at JP¥160.21 versus JP¥160.27.

Stocks were down on Monday as investors reacted after Israel launched strikes against Iran, despite earlier calls for restraint from US President Donald Trump.

The Israel Defence Forces said it had struck military targets ‘belonging to the Iranian terror regime’ after Iran had earlier launched missiles against Israel for the first time since a fragile ceasefire came into effect in April.

In response, Brent crude was trading higher at $97.59 a barrel on Monday morning from $93.70 on Friday. Shares in both BP and Shell were up 1.1% and 0.8% respectively.

Airline shares fell, with IAG down 1.8% while Wizz Air lost 1.9%

The White House has not commented on the Israeli strikes but Trump earlier told Fox News Channel he wanted the Iranians to stop firing missiles and return to the negotiating table.

He also said he was ‘not happy’ about Israel’s strikes on Lebanon on Sunday.

A senior US official told the Associated Press that Trump had spoken to Israel’s Prime Minister Benjamin Netanyahu and called on him not to carry out any immediate response to the Iranian attacks.

In Asia on Monday, the Nikkei 225 in Tokyo was down 3.9%. In China, the Shanghai Composite was 1.7% lower, while the Hang Seng Index in Hong Kong lost 1.3%. The S&P/ASX 200 in Sydney fell 0.7%.

Technology and artificial intelligence stocks were trading lower, including in Asia.

Swissquote analyst Ipek Ozkardeskaya said: ‘The bloodbath across tech is not only due to strong jobs data. As discussed on Friday, there are rumours that investors who rode the chip wave would be tempted to take their profits and free up cash to jump on the SpaceX IPO due later this week.’

Ozkardeskaya also cited an Anthropic report which called for safeguards that could slow or temporarily halt frontier AI development, and an Nvidia report that suggested its next-generation Vera-Rubin platform would use far less memory than previously expected.

The analyst added: ‘Obviously, given the strength and the size of the rally over the past months, a deeper correction would be needed to bring valuations back to healthier and more fundamentally meaningful levels.’

In the US on Friday, Wall Street ended lower, with the Dow Jones Industrial Average down 1.4%, the S&P 500 sank 2.6% while the Nasdaq Composite lost 4.2%.

The yield on the US 10-year Treasury was quoted at 4.57%, widened from 4.54%. The yield on the US 30-year Treasury advanced to 5.03% from 5.01%.

Back in London, shares in Tate & Lyle jumped 12% as its board agreed to a takeover offer by Ingredion which values it at around £2.7 billion.

Ingredion is a Westchester, Illinois-based food and beverage ingredient supplier. Under the terms of the acquisition, shareholders in London-based food and beverage ingredient provider Tate & Lyle will receive 595 pence in cash per share.

They will also receive a final dividend for the financial year to the end of March 2026 of no more than 13.2 pence and an interim dividend for the six months to the end of September of no more than 6.8p.

Tate & Lyle’s directors said the terms of the acquisition are ‘fair and reasonable’ and recommend that shareholders vote in favour of the takeover.

Tate & Lyle Chair David Hearn says: ‘Looking forward, we believe the next chapter with Ingredion will create a business with even greater potential, greater scale, and increased investment in innovation in support of customers. The Board of Tate & Lyle believes Ingredion’s offer represents an attractive opportunity for shareholders to crystallise value in cash, and that it will be an excellent steward of Tate & Lyle.’

Balfour Beatty shares were up 2.5% as it said the independent compliance monitorship of its US subsidiary Balfour Beatty Communities has concluded.

The London-based international infrastructure construction firm said during the period, it has worked to ‘implement a broad improvement programme’.

‘The conclusion of the monitorship marks an important milestone and Communities will continue to embed these improvements as part of its long-term operating model, while maintaining a strong focus on transparency, consistent delivery, operational performance, and the resident experience,’ the firm said.

On the AIM index, shares in GENinCode sank 19% as it reported a wider pretax loss.

The Oxford, England-based genetic testing company said its pretax loss widened to £5.9 million in 2025 from £5.1 million a year earlier.

Revenue increased to £3.1 million from £2.7 million.

The company said it is targeting higher revenue in 2026, but said consolidated revenue in the first four months of the year was broadly in line with 2025.

Gold was lower at $4,291.44 an ounce early on Monday from $4,336.06 late Friday.

Still to come on Monday’s economic calendar is a reading of US consumer inflation expectations.

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