London stocks ended mixed on Monday, while oil prices climbed as investors weighed political developments in the UK and the lack of progress in US-Iran peace talks. The FTSE 100 rose 36.36 points, or 0.4%, to 10,269.43, while the FTSE 250 fell 41.52 points, or 0.2%, to 22,807.86. The AIM All-Share index gained 7.98 points, or 1.0%, to 822.41.
Brent crude for July delivery traded at $103.70 a barrel, up from $101.49 at the London equities close on Friday. The continued stalemate between the US and Iran dashed hopes for an imminent peace deal and heightened concerns over further violence and disruptions to oil supplies through the Strait of Hormuz. US President Donald Trump described Tehran's response to the latest US outline for peace talks as 'totally unacceptable', while Iran demanded the release of its frozen assets and an end to the US blockade of its ports.
Kathleen Brooks, research director at XTB, said: 'The price of oil remains highly reactive to news around the reopening of the Strait of Hormuz, both positive and negative.' JPMorgan analyst Natasha Kaneva predicted oil prices could remain above $100 for most of the year, averaging $97 in 2026, assuming the Strait reopens on June 1. She noted that seasonal demand and large commercial stock draws would keep prices elevated.
In Europe, the CAC 40 in Paris fell 0.7%, while the DAX 40 in Frankfurt edged up 0.1%. In New York, the Dow Jones Industrial Average rose 0.1%, the S&P 500 gained 0.3%, and the Nasdaq Composite added 0.2%. The yield on the US 10-year Treasury widened to 4.39% from 4.37% on Friday.
The pound strengthened to $1.3651 from $1.3623 on Friday, and against the euro it rose to €1.1584 from €1.1568. In London, bond yields crept higher amid domestic political uncertainty. Prime Minister Sir Keir Starmer vowed to prove his 'doubters' wrong in a speech aimed at quelling a growing threat to his leadership after poor local election results, but a growing number of Labour MPs called for a timetable for a leadership transition.
Susannah Streeter, chief investment strategist at Wealth Club, said: 'There is still a sense of jitters playing out as concerns about political instability collide with inflationary fears prompted by the ongoing conflict in the Middle East.' She added that a change of prime minister could prompt wider turmoil, noting that 'political turbulence is never a good look for a nation that needs to project stability.' Among individual stocks, Airtel Africa surged 15% after Bharti Airtel called a meeting to consider a reorganisation of its subsidiaries. British Airways owner IAG rose 6.4% after announcing a €825 million bond buyback. Gold's rise boosted Fresnillo, up 3.5%, and Endeavour Mining, up 3.3%.
