Lunchtime market roundup: Mixed trade as Israel-Iran tensions flare

London’s blue chips pared early losses on Monday despite renewed Israel-Iran fighting, as higher oil prices and shifting rate expectations unsettled investors, though takeover news at Tate & Lyle provided a bright spot.

The FTSE 100 index was up 18.48 points, 0.2%, at 10,386.53. The FTSE 250 was down 12.35 points, 0.1%, at 23,048.39, and the AIM all-share was down 4.76 points, 0.6%, at 792.51.

The Cboe UK 100 was flat at 1,030.61, the Cboe UK 250 was down 0.1% at 19,827.07, and the Cboe small companies was up slightly at 18,800.47.

In European equities on Monday, the CAC 40 in Paris was down 0.4%, while the DAX 40 in Frankfurt was 0.5% lower.

Sterling was at $1.3346 at midday on Monday, down from $1.3371 at the London equities close on Friday. Against the euro, sterling fell to €1.1573 from €1.1583.

The euro was lower at $1.1526 from $1.1542. Against the yen, the dollar was lower at JP¥159.99 versus JP¥160.27.

US President Donald Trump told Iran and Israel to stop fighting after the two foes attacked each other’s territory for the first time since a shaky ceasefire put five weeks of war on hold.

Iran fired dozens of missiles at Israel overnight and Israel responded by targeting military sites in the Islamic republic, sparking fears the escalation could usher in a new full-scale conflict after the April 8 truce.

Tehran’s strikes followed attacks by Israel against targets of the Iran-backed Lebanese Shia group Hezbollah in the southern suburbs of Beirut. Iran had repeatedly warned it would strike Israel if the Lebanese capital was targeted.

‘Israel and Iran must immediately stop ’shooting.’ President DONALD J. TRUMP,’ the US leader wrote on his Truth Social network.

Minutes later, he added in a new post that ‘final negotiations’ towards peace were proceeding ‘subject to ignorance or stupidity getting in its way.’

In response, Brent crude was trading higher at $95.53 a barrel on Monday morning from $93.70 on Friday. Shares in Shell and BP were up 0.9% and 0.8% respectively.

In response to the heightened tensions, shares in housebuilders and airlines were down. Barratt Redrow fell 1.3% while IAG was 1.1% lower. Vistry also fell 2.5% on the FTSE 250 index.

‘Hopes have been dashed for the two key things investors desperately wanted – an end to the Iran war and interest rates not to go up,’ said AJ Bell analyst Dan Coatsworth.

‘Central banks would normally raise rates to fight inflation, and there have been market expectations for a hike ever since the Iran war began. In theory, a sustained inflation shock could hurt the economy and central banks would eventually cut rates to stimulate spending. That could be a story for another day though, particularly as the latest jobs data from the US would suggest the Middle East conflict has yet to cause economic disruption given a strong labour market.’

Coatsworth added: ‘The market was taken aback by the robust US jobs data last Friday and that’s once again changed interest rate expectations. Markets are now pricing in a greater chance of a Fed rate hike this year.’

Stocks in New York were called to open mixed. The Dow Jones Industrial Average was called down 0.1%, the S&P 500 index up 0.3%, and the Nasdaq Composite up 0.7%.

The yield on the US 10-year Treasury was quoted at 4.55%, widened slightly from 4.54%. The yield on the US 30-year Treasury was unchanged at 5.01%.

Back in London, Tate & Lyle shares surged 15% after it agreed to a takeover offer by Ingredion PLC 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.

‘Tate exited its eponymous sugar business more than 15 years ago and might now go out with a whimper. Shareholders might be relieved to exit after a disappointing period affected by weak demand, mounting costs and the impact of weight-loss drugs,’ AJ Bell analyst Dan Coatsworth said.

‘A successful takeover represents another loss to the London market as it struggles to attract substantial new listings to replace the names which are steadily disappearing from its ranks.’

On the AIM index, shares in Beeks Financial Cloud jumped 16%.

The Glasgow, Scotland-based cloud computing and connectivity provider secured the first contract for its artificial intelligence platform, Market Edge Intelligence.

The five-year, $4.8 million, contract is with one of the ‘world’s largest banks’ for deployment of the software in one area of its trading business.

Revenue recognition is set to start immediately, further supporting expectations for the financial year that runs to June.

Over time, the contract has ‘strong expansion potential’ across the customer’s wider trading infrastructure, Beeks Financial added.

Shares in Mpac Group sank 16% as it warned it expects full-year underlying pretax profit to be ‘substantially below’ current market expectations on a like-for-like basis.

The Tadcaster, North Yorkshire-based high-speed packaging and automation solutions company said trading margins have continued to be hurt by delays in customer decision making, competitive pricing pressure, and lower operational leverage from reduced volumes.

As a result, it expects first half margins to be below the prior year, and full-year underlying pretax profit to be ‘substantially’ below current market expectations on a like-for-like basis.

Reflecting on the trading update, Panmure Liberum cut its full-year 2026 adjusted pretax profit forecast for Mpac by 43% to £8.5 million from £15.0 million and 2027 by 32% to £11.4 million from £16.9 million. The broker lowered its share price target for Mpac to 350p from 550p but retained a ’buy’ rating.

Mpac said it continues to focus on ‘maintaining appropriate liquidity and covenant headroom.’

This position will be materially improved by the proceeds from the up to £20 million sale of its bespoke automation solutions Lambert, also announced on Monday.

The business was deemed not to ‘fit within the group’s ongoing strategy,’ after a strategic review.

Gold was lower at $4,308.52 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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