Early market roundup: FTSE 100 notch higher ahead of PM Starmer speech

Stock prices in London were softly higher on Monday morning ahead of a major speech by Prime Minister Keir Starmer following disastrous election results for the Labour Party on Thursday.

The FTSE 100 index opened up 14.49 points, 0.2%, at 10,248.11. The FTSE 250 was down 39.71 points, 0.2%, at 22,809.74, and the AIM all-share was up 0.94 points, 0.1%, at 815.37.

The Cboe UK 100 was up 0.2% at 1,019.79, the Cboe UK 250 was down 0.1% at 19,781.32, and the Cboe small companies was up 0.4 at 18,360.93.

In European equities on Monday, the CAC 40 in Paris was down 0.3%, while the DAX 40 in Frankfurt was down 0.7%.

US President Donald Trump dismissed Iran’s response to US proposals to end the war as ‘totally unacceptable’.

Iran’s semi-official Tasnim news agency said Tehran’s proposal, sent via mediator Pakistan, included an immediate end to hostilities on all fronts, a halt to the US naval blockade of Iranian ports, and guarantees of no further attacks on Iran.

A ceasefire intended to facilitate negotiations to end the war launched by the US and Israel in February has largely held, though occasional exchanges of fire have continued.

Earlier this week, Trump repeated that the war in Iran would be ‘over quickly’. However, Israeli Prime Minister Benjamin Netanyahu said Iran’s stockpile of enriched uranium must be ‘taken out’ before the conflict can be considered finished.

‘There’s still enrichment sites that have to be dismantled,’ Netanyahu said in an interview on CBS’s 60 Minutes.

According to Iranian state media, Tehran’s proposal also includes a demand for compensation for war damage and a reaffirmation of Iranian sovereignty over the Strait of Hormuz.

On Sunday, Iranian President Masoud Pezeshkian did not directly reference the proposal but said: ‘We will never bow our heads before the enemy, and if talk of dialogue or negotiation arises, it does not mean surrender or retreat.’

Trump responded on Truth Social: ‘I have just read the response from Iran’s so-called ’Representatives.’ I don’t like it - TOTALLY UNACCEPTABLE.’

Brent oil was quoted at $104.71 a barrel early Monday, up from $101.49 late Friday.

The pound was quoted at $1.3601 early Monday, lower than $1.3623 at the London equities close on Friday. Against the euro, sterling fell to €1.1555 from €1.1568 a day prior.

The euro traded at $1.1771 early Monday, slightly lower than $1.1773 late Friday. Against the yen, the dollar was quoted at JP¥157.11 versus JP¥156.63.

On the domestic political front, Prime Minister Keir Starmer is due to deliver a major speech at 1000 BST as he seeks to reassure Labour MPs that he remains the right person to lead the party.

Labour suffered heavy losses in elections across Britain on Thursday, prompting speculation about a potential leadership challenge.

In his speech, Starmer is expected to argue that ‘to meet the challenges that our country faces, incremental change won’t cut it’, and to say that the government ‘will be defined by rebuilding our relationship’ with the EU.

Business Secretary Peter Kyle insisted Starmer was ‘the right person that needs to lead us through this’, despite Labour suffering an electoral mauling across England, Scotland and Wales last week.

Starmer has previously insisted he wants to serve 10 years as prime minister, billing it in 2024 as a ‘decade of national renewal’.

Airtel Africa led the FTSE 100, rising 4.3%. BA-owner IAG followed, up 3.5%, after launching a repurchase invitation for €825 million in outstanding senior bonds due 2028. The airline group has also received mixed broker rating updates.

At the bottom of the index, defence names were under pressure. Babcock International fell 3.1%, while industry peer BAE Systems was down 1.5%, mirroring a broader sell-off in defence stocks across Europe.

On the FTSE 250, Victrex was the worst performer, down 6.1%, after reporting a swing to a first-half pretax loss and announcing job cuts.

The Lancashire-based polymer solutions provider swung to a pretax loss of £44.0 million in the six months to March 31, from a £17.2 million profit a year earlier, after booking a £60.6 million impairment charge related to its China manufacturing facility.

Underlying pretax profit fell 18% to £19.0 million from £23.2 million, while underlying earnings per share declined to 17.2p from 22.6p. Revenue rose 1% to £147.1 million from £145.9 million, with sales volumes up 6% to 2,137 tonnes from 2,018 tonnes, driven by its Sustainable Solutions division.

The interim dividend was unchanged at 13.42p per share.

Victrex said its profit improvement plan is progressing, with early cost-saving benefits expected in the second half and at least £10 million of annual savings targeted in financial 2027. The company is reducing headcount by around 10%, mainly in central functions, as part of efforts to create ‘a simpler, more differentiated and more customer focused business’.

Chief Executive James Routh said the company had ‘not adapted quickly enough to changed market conditions and we must now relentlessly focus on improving our execution’.

Looking ahead, Victrex expects full-year underlying pretax profit between £42 million and £44 million, though it warned of potential implications for global demand and energy costs from ongoing events in the Middle East.

Among smaller caps, Nativo jumped 37% after noting contained gold of between around 6,686 and 195,434 ounces at its Tesoro gold project. The company also cited tonnages between 75,051 and 316,200 tonnes and superficial vein lengths of 6,200 metres within the concession.

In Asia on Monday, the Nikkei 225 index in Tokyo closed down 0.5%. In China, the Shanghai Composite ended up 1.1%, while the Hang Seng index in Hong Kong closed marginally lower. The S&P/ASX 200 in Sydney finished down 0.5%.

In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average marginally higher, the S&P 500 up 0.8% and the Nasdaq Composite rising 1.7%.

The yield on the US 10-year Treasury was quoted at 4.39%, widening from 4.37%. The yield on the US 30-year Treasury was quoted at 4.97%, widening from 4.94%.

Gold was quoted at $4,668.10 an ounce early Monday, down from $4,711.50 on Friday.

Still to come on Monday’s economic calendar are US existing home sales data.

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