Lunchtime market roundup: Stocks down with tech and finance weakness

The FTSE 100 was weaker at midday on Monday, with gains in telecoms stocks offset by falls in technology and financial ones, and following the latest flare-up of tensions between the US and Iran.

The FTSE 100 index was down 23.15 points, 0.2%, at 10,474.43. The FTSE 250 was down 59.57 points, 0.3%, at 23,311.84, and the AIM all-share was down 0.84 points, 0.1%, at 762.98.

The Cboe UK 100 was down 0.2% at 1,038.98, the Cboe UK 250 was down 0.1% at 20,048.08, and the Cboe small companies was up 0.1% at 18,469.16.

In UK politics, Prime Minister Keir Starmer began what is expected to be his final week in office with a series of diplomatic engagements, while Labour leadership frontrunner Andy Burnham moved closer to succeeding him.

Starmer travelled to Paris on Monday to meet Ukraine's allies as part of the "coalition of the willing" initiative before attending Bastille Day commemorations on Tuesday. Chancellor Rachel Reeves is also carrying out her final duties, including a Mansion House speech on Tuesday outlining plans to support small businesses.

Burnham, the only declared candidate in Labour's leadership contest, is expected to formally replace Starmer on July 20.

He already has the backing of 322 Labour MPs, comfortably above the 81 nominations required to stand, with further nominations expected when Parliament returns. On Sunday, Reeves urged Burnham to remain "laser focused" on his priorities if he takes office.

In European equities on Monday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was marginally higher.

Geopolitical tensions also remained firmly in focus after the US launched fresh strikes against Iranian military infrastructure in response to attacks on commercial shipping in the Strait of Hormuz.

US Central Command said it had struck "dozens" of targets, including air defence systems, coastal radar installations, missile and drone capabilities and small boats, using aircraft, naval vessels and drones, including one-way attack sea drones for the first time.

"The Strait of Hormuz is a vital maritime corridor for global trade. Iran does not control it," the US military said.

Tehran responded by claiming it had targeted US military bases in Jordan, Bahrain and Kuwait, as well as radar systems in Oman. Iran also warned it would no longer honour the memorandum of understanding signed with Washington if the US failed to meet its commitments to end the conflict.

"Each time that the other party has failed to meet its obligations, we did not uphold ours...We will continue to act in this manner," foreign ministry spokesman Esmaeil Baqaei told a press conference in Tehran.

The renewed tensions pushed oil prices higher, with Brent crude trading at USD78.49 a barrel at midday on Monday, up from USD75.86 late Friday.

The pound was quoted at USD1.3394 at midday Monday, down from USD1.3419 at the London equities close on Friday. Against the euro, sterling slipped to EUR1.1709 from EUR1.1737. The euro edged down to USD1.1433 from USD1.1434, while the dollar strengthened to JPY162.10 from JPY161.49.

Back in London, Vodafone led the FTSE 100, rising 5.3% as it extended Friday's gains after billionaire telecoms investor Xavier Niel became its largest shareholder.

BT Group added 3.0%, benefiting from positive read-across from Vodafone.

Computacenter climbed 2.6% after Stifel upgraded the technology services provider to 'buy' from 'hold' and lifted its price target to 5,235 pence from 3,584p, citing improving earnings quality alongside strong revenue growth. Also, Bank of America initiated its coverage with 'buy' and a price target of 5,552 pence, highlighting its "expertise" in complex AI data centre deployments for hyperscalers, neoclouds and high-frequency trading firms, which the broker believes should drive an acceleration in growth.

On the FTSE 250, ME Group International rose 9.7% after saying May and June trading had returned to more normal seasonal patterns.

PageGroup advanced 9.5% after reporting "signs of normalisation" in the first half, while Hays gained 7.1% on positive read-across from PageGroup and after saying on Friday it expects annual profit to come in at the top end of market expectations.

At the other end of the mid-cap index, Plus500 fell 13% as investors reacted to slower second-quarter revenue and earnings growth.

Oxford Nanopore Technologies lost 9.2% after warning that first-half revenue would come in below expectations.

Raspberry Pi Holdings shed 4.7%, with technology shares under pressure after South Korean memory chip maker SK Hynix slumped 15% in Seoul trading.

Among smaller caps, Ixico dropped 14% after saying two discontinued programmes will reduce its order book by £1.5 million over the next two years.

Elsewhere, System1 rose 3.6% after revealing it had rejected two takeover approaches from Brave Bison Group, whose shares fell 4.6%.

System1 said the first all-share proposal, received on June 8, valued the marketing company at around 297 pence per share through an offer of 3.5988 Brave Bison shares for each System1 share. The board said the proposal materially undervalued the company and rejected it.

Following further discussions with Brave Bison, which already owns a 28% stake in System1 and is its largest shareholder, a revised cash-and-shares proposal was submitted last Friday.

Stocks in New York were called lower. The Dow Jones Industrial Average was called flat, the S&P 500 index down 0.3%, and the Nasdaq Composite down 0.9%.

The yield on the US 10-year Treasury was quoted at 4.58%, widening from 4.56%. The yield on the US 30-year Treasury was quoted at 5.08%, widening from 5.06%.

Separately, the EU and the UK unveiled coordinated sanctions against Russia over alleged cyber attacks across Europe.

The measures target individuals and entities accused of involvement in cyber operations linked to Russia's FSB and GRU intelligence agencies. Brussels imposed sanctions on nine individuals and four entities, while the UK added 24 names to its sanctions list.

The British government described the package as the first joint cyber sanctions initiative with the EU and said it targeted Russia's "persistent and increasingly reckless attempts to sow chaos and division across Europe". Those sanctioned include GRU officers and alleged cybercriminals accused of working alongside the Russian state.

Gold was quoted at USD4,056.90 an ounce at midday Monday, down from USD4,101.39 on Friday.

On Monday's economic calendar, attention turns to the US monthly budget statement.

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