London stocks ended mixed on Monday, while oil prices pushed higher as investors weighed political developments in the UK and the lack of progress in peace talks between the US and Iran.
Market Performance
The FTSE 100 closed up 36.36 points, or 0.4%, at 10,269.43. The FTSE 250 ended down 41.52 points, or 0.2%, at 22,807.86, and the AIM All-Share rose 7.98 points, or 1.0%, at 822.41.
Brent crude for July delivery was trading at 103.70 US dollars a barrel on Monday, up from 101.49 dollars at the time of the equities close in London on Friday.
US-Iran Stalemate
The continued stalemate between the US and Iran dashed investors’ hopes of 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” in a social media post. Iran said it had demanded the release of its frozen assets and the end of a US blockade of its ports.
“The price of oil remains highly reactive to news around the reopening of the Strait of Hormuz, both positive and negative,” said Kathleen Brooks, research director at trading group XTB. “Signs that tankers are getting through the Strait, even if it is a trickle, could weigh on the oil price in the coming days,” she added.
But JPMorgan analyst Natasha Kaneva thinks that oil prices could remain a little over 100 dollars for most of the rest of this year, averaging 97 dollars for 2026 as a whole, in a scenario assuming the Strait of Hormuz reopens on June 1. “Even if the Strait reopens in June, the seasonal lift in summer demand, combined with the exceptionally large commercial stock draws seen in March and April, and likely again in May, should push OECD inventories toward operational stress levels by August. This is what keeps crude prices elevated in the low 100s (US dollars) through most of the year, rather than allowing a sharp retracement once Hormuz reopens,” Ms Kaneva wrote in a research note.
Global Markets
In Europe on Monday, the CAC 40 in Paris ended down 0.7%, and the DAX 40 in Frankfurt edged up 0.1%. In New York, the Dow Jones Industrial Average was up 0.1%, the S&P 500 rose 0.3% while the Nasdaq Composite was up 0.2%.
The yield on the US 10-year Treasury widened to 4.39% on Monday from 4.37% on Friday. The yield on the US 30-year Treasury stretched to 4.97% from 4.94%.
Currency and Bond Markets
The pound firmed to 1.3651 US dollars on Monday afternoon from 1.3623 dollars on Friday. Against the euro, sterling was higher at 1.1584 euros from 1.1568 euros on Friday. In London, bond yields crept higher, with domestic political uncertainty adding to the Middle East worry.
UK Political Uncertainty
Prime Minister Sir Keir Starmer vowed to prove his “doubters” wrong in a speech seeking to quell a growing threat to his leadership following disastrous local election results. But a growing number of Labour party MPs called for Sir Keir to outline a timetable for a transition of leadership.
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. His speech was designed to project a keep calm and carry on message, but the worry is that it lacks the real substance needed to keep Labour MPs on side. The concern is that a change of prime minister would prompt wider turmoil at the top of government. Political turbulence is never a good look for a nation that needs to project stability in order to attract long-term investment.”
Individual Stock Movers
Airtel Africa stormed 15% higher after Bharti Airtel – which has a 63% stake in the company – convened a meeting for May 13 to consider a reorganisation of its subsidiaries’ shareholding structure, including Airtel. In an exchange filing, Bharti Airtel said the reorganisation could involve consolidation or acquisition of shares in its subsidiaries.
British Airways owner IAG shot up 6.4% as it announced the 825 million euro (£712 million) buyback of outstanding 1.125% senior unsecured convertible bonds due 2028.
The rising gold price boosted Fresnillo, up 3.5%, and Endeavour Mining, up 3.3%. Gold traded higher at 4,733.27 US dollars an ounce on Monday, from 4,711.50 dollars on Friday.
Compass Group climbed 2.3% after raising guidance following better-than-expected interim results. The Chertsey, England-based contract caterer said pre-tax profit rose 15% to 1.47 billion dollars (£1.08 billion) in the half-year to March 31 from 1.28 billion dollars (£994 million) the year prior. Underlying operating profit shot up 12% to 1.84 billion dollars (£1.35 billion) from 1.65 billion dollars (£1.21 billion). Revenue improved 11% to 24.98 billion dollars (£18.31 billion) from 22.57 billion dollars (£16.54 billion) a year prior, with organic growth of 7.2%, benefiting from strong client retention at 96%. UBS pointed out revenue was 0.5% ahead of Visible Alpha consensus of 24.86 billion dollars (£18.22 billion), and underlying operating profit was 1% above consensus of 1.82 billion dollars (£1.33 billion). Looking ahead, Compass now expects underlying operating profit growth of “above 11%” for the full-year, its guidance raised from “around 10%”.
F&C Investment Trust’s share price fell 75%, reflecting a four-to-one share split coming into effect.
FTSE 100 Risers and Fallers
The biggest risers on the FTSE 100 were: Airtel Africa, up 53.2p at 420.2p; International Consolidated Airlines, up 24.7p at 409.7p; Anglo American, up 151.0p at 4,000.0p; Antofagasta, up 144.5p at 4,042.0p; and Fresnillo, up 126.0p at 3,698.0p.
The biggest fallers on the FTSE 100 were: F&C Investment Trust, down 989.0p at 329.0p; JD Sports Fashion, down 3.44p at 71.64p; Entain, down 21.4p at 560.6p; Burberry Group, down 40.5p at 1,169.5p; and Whitbread, down 77.0p at 2,333.0p.
Outlook
Tuesday’s global economic calendar has an Australian consumer confidence print overnight and German and US inflation figures. Tuesday’s local corporate calendar has half-year results from tobacco manufacturer Imperial Brands, full-year results from telecommunications group Vodafone, and a trading statement from engineering company IMI.
