London stocks closed mostly lower on Monday, though the FTSE 100 managed to gain 0.6% as oil prices remained above $100 a barrel. The blue-chip index rose 56.54 points to 10,317.69, while the FTSE 250 fell 0.2% and the AIM all-share dropped 0.7%.
Geopolitical tensions in the Middle East continued to drive markets, with Nato and Western allies pushing back on US President Donald Trump's demand for military help to reopen the Strait of Hormuz. UK Prime Minister Sir Keir Starmer said London was working on a 'viable' plan but ruled out a Nato mission, while Berlin insisted it was 'not Nato's war'. Spain, Japan and Australia also distanced themselves from military involvement.
Oil prices remained elevated, with Brent crude at $102.83 a barrel at the London close, up from $101.57 on Friday. IG chief market analyst Chris Beauchamp noted that 'stock markets stand or fall by the oil price at present', adding that hopes the conflict will be short-lived are supporting equities.
Gold miners and defence stocks were among the winners, with Endeavour Mining up 3.1%, Melrose rising 1.4% and Rolls-Royce gaining 1.2%. However, gold itself fell to $4,983.55 an ounce from $5,043.40. Airlines suffered, with easyJet falling 1.8% and Wizz Air losing 2.9%.
International Energy Agency chief Fatih Birol said more strategic oil stocks could be released as a 'buffer' but stressed that reopening the Strait of Hormuz is essential for stable oil flows. Meanwhile, Iran said it was ready to take the war 'as far as necessary' as it launched strikes across the region.
