Late market roundup: FTSE 100 ends in red despite hopes of end to war

Stock indices swung wildly but ultimately ended Monday lower, as oil retreated from its earlier high with US President Donald Trump cooling his rhetoric on Iran.

Trump said that he had instructed strikes against Iranian energy sites to be postponed for five days, and that talks were underway to end hostilities.

Trump said the US has held ‘productive conversations’ with Iran on a ‘complete and total resolution’ of the conflict.

Tom Stevenson, investment director at Fidelity International, said Trump’s ‘dramatic U-turn’ has ‘once again triggered gyrations in global financial markets.’

The FTSE 100 index closed down 24.18 points, 0.2%, at 9,894.15. In a fluctuating trading session, the blue-chip index traded as high as 10,036.65 and as low as 9,670.46.

The FTSE 250 was down 95.31 points, 0.5%, at 21,246.66, above an early low of 20,626.98. The AIM All-Share was down 4.75 points, 0.7%, at 713.42, after falling as low as 693.87.

The Cboe UK 100 was down 0.1% at 985.05, the Cboe UK 250 was down 0.1% at 18,498.03, and the Cboe UK Small Companies Index was down 1.1% at 16,779.28.

In a post on Truth Social, Trump said he had instructed officials to delay any strikes on Iranian power plants and energy infrastructure for five days, subject to the outcome of ongoing discussions.

The reversal came ahead of a Monday night ultimatum for the Islamic republic to either reopen the Strait of Hormuz shipping lane, or see Trump ‘obliterate’ its power plants.

However, Iranian media said there were no negotiations between Tehran and Washington.

‘There are no talks between Tehran and Washington,’ said the Mehr news agency, citing Iran’s foreign ministry, adding that Trump’s statements were part of a push ‘to reduce energy prices’.

Trump claimed his administration was discussing with an unidentified ‘top person’, but not the country’s supreme leader Mojtaba Khamenei, who is believed to be injured.

‘We’ve wiped out the leadership phase one, phase two, and largely phase three. But we’re dealing with the man who I believe is the most respected and the leader,’ Trump told reporters in Florida.

David Morrison, senior market analyst at Trade Nation said: ‘It’s difficult to know how seriously to take this latest interjection from President Trump. It certainly doesn’t make trading any easier, although that’s a side issue when so many lives are at stake. But that’s a risk with wars, particularly when there’s chaotic and mercurial leadership on both sides.

‘This appears, at first glance, to let the Trump administration off the hook. As many analysts pointed out, the lack of any clear, achievable war aims meant that President Trump could walk away, claiming victory, at any point. That appears to be what he is doing now.’

But Morrison added that traders will also be mindful that this could be a ‘false dawn’.

The issues which weighed on equities before the outbreak of this war ‘are still there. And more so. Two months ago, investors were looking forward to additional rate cuts this year. That is no longer the case,’ he added.

UK Prime Minister Keir Starmer welcomed the talks between the US and Iran, and said the UK had been told about them beforehand.

Brent oil was quoted at $102.07 a barrel at the time of the London equities close on Monday, down from $109.78 late on Friday. However, it had earlier traded as high as $114.67.

The head of the International Energy Agency, Fatih Birol, warned that in the event of a protracted war, daily oil losses put the world on track for a crisis worse than the combined impact of both 1970s oil shocks and Russia’s invasion of Ukraine.

On the FTSE 100, oil majors BP and Shell fell 4.2% and 2.3% respectively. On the FTSE 250, oil exploration firms Ithaca Energy and Harbour Energy slid 8.8% and 6.5%.

Conversely, airlines rallied on hopes for lower fuel prices and less disruption to the travel industry.

British Airways owner International Consolidated Airlines Group rose 4.5%, and budget airline easyJet climbed 2.4%.

The about turn in oil saw gold pare early heavy losses. The yellow metal traded at $4,376.19 an ounce on Monday, still down against $4,593.70 on Friday, but above early lows of $4,117.89.

In European equities on Monday, the CAC 40 in Paris closed up 1.2%, while the DAX 40 in Frankfurt ended 1.5% higher.

Stocks in New York were higher. The Dow Jones Industrial Average was up 1.4%, the S&P 500 index was 1.2% higher, and the Nasdaq Composite climbed 1.3%.

The yield on the US 10-year Treasury was quoted at 4.38%, stretched from 4.37%. The yield on the US 30-year Treasury was unchanged at 4.94% from Friday.

In London, the yield on 10-year gilts fell back sharply. They traded at 4.91% at the time of the London close, after touching 5.09% earlier on Monday.

The lower UK bond yields saw rate-sensitive housebuilders rally. Barratt Redrow rose 4.3%, Persimmon firmed 2.6% and Taylor Wimpey added 1.2%.

The pound was quoted higher at $1.3390 at the time of the London equities close on Monday, compared to $1.3323 on Friday.

The euro stood at $1.1579, higher against $1.1561. Against the yen, the dollar was trading lower at JP¥158.79 compared to JP¥159.20.

On the FTSE 100, Croda rose 5.6%, as Goldman Sachs double-upgraded the specialty chemicals firm to ’buy’ from ’sell’.

The broker said Croda’s market recovery actions have delivered ahead of the broker’s expectations from an organic sales growth perspective, outperforming peers.

Entain jumped 8.2%, following a report in the Wall Street Journal that a pair of US senators are introducing legislation to prohibit entities regulated by the Commodity Futures Trading Commission from listing contracts related to sporting events.

The WSJ report said this will include prediction-market exchanges Kalshi and Polymarket’s US platform.

‘The CFTC is greenlighting these markets and even promoting their growth,’ Senator Adam Schiff said. ‘It’s time for Congress to step in and eliminate this backdoor which violates state consumer protections, intrudes upon tribal sovereignty and offers no public revenue.’

Entain, which owns Ladbrokes, also has a 50% stake in BetMGM in the US.

‘We expect a material positive share price reaction for Entain’, commented Citi analyst Monique Pollard.

The biggest risers on the FTSE 100 were Entain, up 44.80p at 588.80p, Antofagasta, up 230.00p at 3,373.00p, Croda, up 143.00p at 2,697.00p, Anglo American, up 158.00p at 3,025.00p and IAG, up 15.70p at 361.50p.

The biggest fallers on the FTSE 100 were BT, down 12.60p at 199.70p, BAE Systems, down 110.00p at 2,140.00p, BP, down 23.70p at 538.60p, Tesco, down 16.20p at 452.70p and Admiral, down 106.00p at 3,102.00p.

Tuesday’s global economic calendar has Japan’s inflation figures overnight, a slew of flash composite PMI readings, and the Richmond Fed manufacturing index in the US.

Tuesday’s UK corporate calendar has half-year results from housebuilder Bellway, and full-year results from premium drink mixer manufacturer Fevertree Drinks and B&Q owner, Kingfisher.

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