Lunchtime market roundup: Stocks down, oil climbs past USD85 mark

London stocks were lower at midday on Tuesday, ahead of US consumer inflation data and following renewed military escalations between the US and Iran.

The FTSE 100 index was down 43.41 points, 0.4%, at 10,454.88. The FTSE 250 was down 164.50 points, 0.7%, at 23,232.08, and the AIM all-share was down 1.30 points, 0.2%, at 759.84.

The Cboe UK 100 was down 0.3% at 1,038.54, the Cboe UK 250 was down 0.7% at 19,986.10, and the Cboe small companies was down 0.1% at 18,434.76.

In European equities on Tuesday, the CAC 40 in Paris was down 0.7%, while the DAX 40 in Frankfurt was down 0.5%.

Brent crude surged to USD86.68 a barrel by midday Tuesday, up sharply from USD79.42 late Monday, after the conflict in the Middle East intensified for a third consecutive day.

The US military said it carried out fresh strikes across a broad swathe of Iran overnight, with Iranian media reporting explosions in the port city of Bandar Abbas and on the islands of Kish, Qeshm and Abu Musa. Tehran, meanwhile, launched attacks against US regional allies.

The renewed hostilities came after US President Donald Trump informed Congress that military action against Iran had resumed, while US Central Command said it would reimpose a naval blockade of Iranian ports from 1600 EDT on Tuesday.

The conflict also disrupted global shipping.

A tanker reported being struck by a missile while transiting the Strait of Hormuz, India summoned Iran's deputy ambassador following the death of an Indian sailor in the waterway, and the UAE said Iranian missile strikes on its tankers in Omani waters had killed one crew member.

The spike in crude prices supported energy stocks. BP rose 2.6%, and Shell added 1.7%.

The pound was quoted at USD1.3377 at midday Tuesday, little changed from USD1.3378 at the London equities close on Monday. Against the euro, sterling edged up to EUR1.1734 from EUR1.1733. The euro traded at USD1.1395, down from USD1.1400, while the dollar slipped to JPY162.23 from JPY162.32.

Back in London, InterContinental Hotels Group fell 4.0% to the bottom of the FTSE 100, while Pearson lost 3.2% after JPMorgan downgraded the education publisher to 'neutral'.

In the FTSE 250, Genus rose 4.8% after saying it expects annual profit to come in ahead of market expectations.

Atalaya Mining Copper advanced 4.1% after reporting stronger second-quarter copper production, while Ithaca Energy climbed 4.0% after raising its operating guidance following a strong fourth quarter.

Among the fallers, ME Group International dropped 5.5%, Ceres Power Holdings fell 4.7%, Workspace Group lost 4.2%, while IntegraFin Holdings shed 4.2% despite saying its Transact investment platform remains "well-positioned" after reporting growth in funds under direction.

Among smaller caps, Ondo InsurTech jumped 21%.

Safestay shares dropped 33%, after it was disclosed that Infill Capital Partners will not make an offer for the hostel operator.

Ironveld surged 34% after saying its dense media separation plant has entered "sustained production" and is now operating 16 hours per day, while Getech Group climbed 13% after forecasting higher interim revenue and Ebitda.

Headlam Group slumped 25% after reporting lower interim revenue.

In political developments, EU member states were scrambling to agree a fresh package of sanctions against Russia before a Wednesday deadline that could otherwise force an automatic increase in the oil price cap designed to curb Moscow's export revenues.

Under current rules, the cap would rise from USD44 a barrel to better reflect elevated global oil prices following the Middle East conflict. Brussels is seeking to freeze the existing level for several more months to prevent Russia from benefiting from the surge in crude prices.

Meanwhile, the Kremlin dismissed new cyber attack accusations from the EU and UK as "baseless".

The comments came a day after London and Brussels announced coordinated sanctions targeting individuals and entities they accused of participating in Russian cyber operations against Europe.

Kremlin spokesman Dmitry Peskov rejected the allegations, saying Moscow did not accept them.

Stocks in New York were called mixed. The Dow Jones Industrial Average was called down 0.2%, the S&P 500 index down 0.1%, and the Nasdaq Composite up 0.4%.

Investor attention now turns to a busy afternoon in the US, with June consumer price inflation data due alongside second-quarter earnings from JPMorgan Chase, Bank of America, Wells Fargo, Goldman Sachs and Citigroup. Markets will also watch comments from US Federal Reserve Chair Kevin Warsh.

Economists expect US consumer price inflation to ease to 3.8% in June from 4.2% in May.

Results are due today from JPMorgan, Bank of America, Wells Fargo, Goldman Sachs and Citigroup.

The yield on the US 10-year Treasury was quoted at 4.62%, widening from 4.60%. The yield on the US 30-year Treasury was quoted at 5.11%, widening from 5.09%.

Gold was quoted at USD4,019.40 an ounce at midday Tuesday, slightly higher than USD4,015.30 on Monday.

In UK consumer news, prices for used electric vehicles rose on an annual basis for the first time since December 2022, according to Autotrader.

Average prices for used EVs increased 1.6% in June from a year earlier to £24,662. Vehicles aged between three and five years led the gains, with prices rising 8.9% amid strong demand and tightening supply.

Overall, the used EV market outperformed the wider used car market, where prices increased 0.8%. Autotrader described electric vehicles as the "standout story" of the market.

Still to come on Tuesday's economic calendar are US consumer price inflation data and the Redbook index.

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