The FTSE 100 ended in the red on Monday, closing down 23.80 points, 0.2%, at 10,484.22. The FTSE 250 fell 132.34 points, 0.6%, to 23,014.85, while the AIM All-Share dipped 0.24 points to 770.11. In Europe, the CAC 40 in Paris and the DAX 40 in Frankfurt both closed 0.2% lower. In New York, the Dow Jones Industrial Average rose 0.4%, the S&P 500 gained 0.6%, and the Nasdaq Composite was 1.0% higher.
Oil Prices Rise on Middle East Tensions
Oil prices edged higher after the US and Iran exchanged fire over the weekend. Although the US said it had agreed with Iran to halt attacks and continue talks, the strikes disrupted shipping through the vital Strait of Hormuz. Brent crude for August delivery traded at 72.85 dollars a barrel on Monday, up from 71.49 dollars on Friday. Russ Mould, investment director at AJ Bell, noted that the scale of the oil price hike “wasn’t as bad as it could have been”, though investors “will want greater reassurance that the ceasefire is lasting and not a flash in the pan”.
Sterling Strengthens on Burnham Speech
Sterling climbed higher as Andy Burnham set out policy plans in his first major speech since launching a leadership bid. Burnham promised a “new direction” for the UK with the biggest transfer of power out of Whitehall in modern times. Barclays said the most telling aspect from a market perspective was his commitment to existing fiscal rules: “There was no sense of trying to find ways to game the rules or increase borrowing, which would have worried markets.” The pound traded at 1.3247 dollars on Monday afternoon, up from 1.3216 dollars on Friday. Against the euro, sterling firmed to 1.1597 euros from 1.1588 euros. The euro rose against the greenback to 1.1422 dollars from 1.1406 dollars. Against the yen, the dollar traded at 161.93 yen, up from 161.64 yen. The US 10-year Treasury yield widened to 4.39% from 4.37%, while the 30-year yield was flat at 4.86%.
Housebuilders Fall on Weak Mortgage Data
Housebuilders were lower in London after Bank of England figures showed UK mortgage borrowing slowed sharply in May. Net borrowing of mortgage debt by individuals fell to £2.9 billion in May from £4.4 billion in April, below the previous six-month average of £5.1 billion and the weakest since May 2025. Net mortgage approvals for house purchases dropped to 56,200 in May from 66,000 in April, below the consensus forecast of 63,000 and the lowest since December 2023. RBC Capital Markets analyst Anthony Codling said: “The sharp monthly reversal is a warning shot. Mortgage approvals typically translate into housing transactions with a three-to-four-month lag, which means May’s softness will feed through to sales completions in late summer and early autumn. For housebuilders juggling the trade-off between pricing and volume, this data nudges them back towards caution.” He added: “Housebuilders will be watching June’s data closely to see whether May was an aberration or the start of a more meaningful cooling.” On the FTSE 100, Persimmon shares fell 2.5% and Barratt Redrow slid 2.2%. On the FTSE 250, Vistry sank 4.2%, Bellway lost 2.1%, Taylor Wimpey fell 2.5%, and Berkeley Group dropped 2.1%.
Babcock Leads Fallers; Bridgepoint Jumps
Babcock International led the FTSE 100 fallers, with shares down 5.2% amid reports the government has dropped plans for an advanced warship that the defence group was vying to develop. Fresnillo and Endeavour Mining fell 3.0% and 2.9% respectively as gold prices weakened. The yellow metal traded at 4,023.68 dollars an ounce, down from 4,085.63 dollars on Friday. British American Tobacco fell 0.7% after saying its Fit2Win transformation programme is on track, impacting around 9,000 roles globally. The company expects changes to result in a reduction of about 5,500 roles globally by year-end, excluding the US. On the FTSE 250, Bridgepoint Group jumped 16% after striking a deal to acquire Kayne Anderson Real Estate for 1.39 billion dollars upfront, boosting its assets under management to around 120 billion dollars.
Other Movers and Outlook
Lion Finance climbed 2.2% after JPMorgan raised its price target to 13,900p from 13,100p, citing a “high-quality franchise” and “runway for deeper customer penetration”. The biggest risers on the FTSE 100 included Metlen Energy & Metals, up 1.16p at 42.20p; Entain, up 13.60p at 591.40p; Lion Finance, up 240.00p at 11,110.00p; SSE, up 38.00p at 2,459.00p; and Experian, up 31.00p at 2,551.00p. The biggest fallers were Babcock International, down 50.00p at 921.00p; Fresnillo, down 87.00p at 2,781.00p; Endeavour Mining, down 113.00p at 3,739.00p; Persimmon, down 27.50p at 1,082.00p; and Anglo American, down 91.00p at 3,627.00p. Tuesday’s global economic calendar features GDP prints in the UK and Canada, plus inflation data in France and Germany. Local corporate releases include trading statements from J Sainsbury and Cake Box.
