Lunchtime market roundup: Housebuilders shine as oil down; Astra falls

Stock prices in London were mixed at Monday midday, with housebuilders performing well following a decline in oil prices; meanwhile AstraZeneca shares suffered amid a report it is considering merging with New Jersey-based Bristol Myers Squibb.

Hopes for renewed diplomacy between the US and Iran also lifted broader market sentiment.

The FTSE 100 index was down 3.89 points, marginally lower, at 10,863.62. The FTSE 250 was up 239.09 points, 1.0%, at 24,214.11, and the AIM all-share was up 4.03 points, 0.5%, at 766.58.

The Cboe UK 100 was down 0.2% at 1,079.03, the Cboe UK 250 was up 0.9% at 21,020.30, and the Cboe small companies was down 0.1% at 18,668.70.

In European equities on Monday, the CAC 40 in Paris rose 1.3%, while the DAX 40 in Frankfurt climbed 1.5% to a record above the 26,000 mark.

Investor sentiment improved on hopes of a diplomatic breakthrough between the US and Iran.

Brent crude traded at USD83.76 a barrel at midday on Monday, down sharply from USD90.12 late Friday.

Oil prices retreated after US President Donald Trump said fresh negotiations with Iran would begin on Monday after he opted to postpone military strikes in favour of pursuing a diplomatic solution to the conflict, now in its sixth month.

Trump said Iran, together with US partners Saudi Arabia, the UAE and Qatar, had urged him to delay what he described as "the biggest attack since World War II". He said the talks would focus on reopening the Strait of Hormuz, a vital route for global energy supplies, before ultimately addressing Iran's denuclearisation.

Iran, however, denied negotiations with Washington were under way.

"We are not currently negotiating with the US. Our negotiations are with Oman to secure passage through the Strait of Hormuz," said ministry spokesman Esmaeil Baqaei during a weekly press briefing.

Iran has kept control of Hormuz since the outbreak of the war in the Middle East on February 28.

It has insisted that ships transiting the waterway, which is crucial for the global energy trade, should use a route designated by Iran after requesting permission and paying service fees.

The pound traded at USD1.3455 at midday on Monday, down from USD1.3463 at Friday's London equities close. Against the euro, the pound was lower at EUR1.1675 from EUR1.1681. The euro fell to USD1.1518 from USD1.1535.

Against the yen, the dollar fell to JPY156.92 from JPY159.31 after Trump confirmed Washington had intervened alongside Japan to support the Japanese currency, describing the move as "a signal of friendship" that would benefit both the US and the global economy.

Back in London, housebuilders were among the strongest performers as traders pared back expectations for further Bank of England rate hikes.

The decline in oil prices eased concerns over energy-driven inflation, with markets now pricing in less than a 25% chance of a BoE rate hike in September and around a 75% probability of a move in November, according to Bloomberg.

Persimmon rose 3.8%, Barratt Redrow added 3.2%, and Howden Joinery advanced 3.1%.

At the other end of the FTSE 100, IG Group Holdings fell 6.0%, extending Friday's 14% slide as investors continued to react cautiously to the company's proposed acquisition of US sports fantasy and prediction markets operator Underdog for up to USD1.3 billion.

AstraZeneca shed 5.8% after the Financial Times reported the pharmaceutical firm had held talks with New Jersey-based Bristol Myers Squibb over a potential merger that could value the combined company at around USD400 billion.

Bristol Myers Squibb shares jumped 6.4% during premarket trading in New York.

Clarkson topped the FTSE 250, jumping 7.9% after saying full-year results are expected to be materially ahead of market expectations following record interim profit.

The shipping services firm said strong trading conditions were amplified by disruption in the Strait of Hormuz.

"This disruption reshaped trade flows, driving an initial surge in freight rates and elevated hedging activity as clients sought to manage price and freight exposure. This was followed by a period of operational dislocation, with vessels repositioned and supply chains disrupted," Clarkson explained.

Among smaller companies, Acceler8 Ventures surged 46%.

BSF Enterprise gained 38% after signing binding heads of terms with US-based Imposter LLC to form a joint venture to commercialise its T-Rex leather technology in North America.

Wildcat Gold fell 12% after saying it expects to cancel its Main Market listing and pursue a faster move to the Aquis Stock Exchange.

GS Chain dropped 10% after terminating its proposed acquisition of GMM.

RWS Holdings jumped 15% after agreeing to acquire Acogroup, the parent company of language services provider Acolad, for £22.4 million.

Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.7%, the S&P 500 up 0.5% and the Nasdaq Composite up 0.5%.

The yield on the US 10-year Treasury was quoted at 4.68%, narrowing from 4.74%. The yield on the US 30-year Treasury was quoted at 5.23%, narrowing from 5.27%.

Gold traded at USD4,054.04 an ounce at midday on Monday, up from USD4,041.68 on Friday.

Still to come on Monday's economic calendar are US manufacturing PMI data and the ISM manufacturing PMI.

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