- FTSE 100 up 1 point at 10,498
- Oil prices hit 3-week high amid new US-Iran strikes
- Plus500, PageGroup, Oxford Nanopore post numbers
5.15pm: Investors cautious
As investors eyed geopolitical developments, London stocks finished the day little changed, up 1 point at 10,498.
The US’ apparent decision to pile on the pressure on Iran by reinstating the blockade has lifted oil prices, though the reaction remains calm relative to the potential for supply disruption. Markets seem to be pricing in a resumption of negotiations in due course, given the lack of appetite for an extended standoff, but with oil stockpiles not fully rebuilt this is a risky view to take,” IG chief market analyst Chris Beauchamp said.
“This limited exchange of projectiles is still nowhere near the intensity of March’s conflict, leaving hope for a relatively quick resolution.”
4.14pm: Flat here, down over the pond
European stocks are staying roughly flat, while the main US stock indices are in the red.
Precious metals miners, tech trusts and airline-related names are the prominent fallers: Fresnillo, Endeavour Mining, IAG, Rolls-Royce, Scottish Mortgage and Polar Cap Tech Trust.
Defensives like BAT, M&S, AstraZeneca, Halma, Imperial and banks are also in the red.
Across the Channel, the main benchmarks are up 0.2-0.3%, with the Stoxx 600 just below flat.
Wall Street remains under pressure, with the Nasdaq off 0.9%, the S&P down 0.4%, and the Dow Jones slipping 0.2%.
On the latter, the largest fallers are Honeywell, Boeing, Amgen, Caterpillar and Nvidia, all down 1.5% or more. At the other end are Salesforce, IMB, Chevron, Disney and Amazon.
3.40pm: US will be 'guardian of Hormuz strait'
Donald Trump says the US will act as the "guardian of the Hormuz Strait", proposing a 20% charge on cargo using the waterway while restricting access for Iranian ships and customers.
In a post on his social media platform, the US President says that the Strait of Hormuz is "open, and will remain open, with or without Iran".
“We are reinstating the Iranian blockade, so named because it is only stopping Iran’s ships or customers from entering or leaving. All other countries will have fair and open use of the Strait," he posted on Truth Social.
He adds that the US will act as guardian of the waterway, but "as a matter of fairness will be reimbursed at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World".
He says the process "will begin immediately".
As a reminder, US forces said yesterday that they had hit many of Iran's coastal missile and drone capabilities as well as small boats, radar sites and air-defence systems.
3.24pm: AstraZeneca downgrade
AstraZeneca shares are down again today, falling 1.7% to around 12,610p as HSBC downgraded to 'hold' from 'buy', arguing that last week's trial failure has removed the central pillar of its bull case and left a tougher path ahead.
The bank cut its target price to 13,750p from 16,500p, implying limited upside.
Following the failure of the Wainua phase III trial in a form of heart disease, HSBC said success in that study had underpinned its positive stance, and the outcome was worse than either it or management had expected.
2.52pm: Mixed US open, FTSE in green
It's a mixed open in New York, with investors switching out of tech and buying more defensive names ahead of earnings season and some other market moving events later this week.
The Dow Jones has opened up 0.3%, helped by gains in Salesforce, Chevron and Apple.
The S&P 500 slipped 0.3%, while the Nasdaq fell almost 1% as chipmakers led the declines.
Top fallers on the tech-laden index are SanDisk, Arm Holdings, Western Digital, Micron and Marvell, all dropping over 7%, with Nvidia also trading 1.4% lower, as investors take profits across the semiconductor sector.
1.33pm: AI is the new inflation worry
"While oil prices have fallen quite a bit from the Iran conflict's peak, our inflation forecasts have worsened," says Barclays.
The bank's macro analysts say AI has emerged as an unexpected source of inflationary pressure, complicating the US Federal Reserve's battle against rising prices.
While investors had been focused on the fading impact of the Iran-related oil shock (although that could go either way), the bigger story is that inflation has become broader and more persistent.
Brent crude retreated to a four-month low after the US-Iran ceasefire agreement was signed last month, yet Barclays has raised its forecast for core personal consumption expenditure inflation to 3.3% by the end of the 2026 calendar year from 2.8% at the start of the year.
To illustrate the issue, the analysts point out that computer software and accessories – "the category within both the CPI and PCE price indices that carries the clearest imprint of the explosion in memory chip prices" – has jumped 17% since last December, "after having been in deflation for much of its history".
"Robust data center demand, constrained supply, and long-dated purchasing agreements are keeping memory prices high, and those rising costs are filtering through into personal computers and other hardware.
"Memory inflation still has legs, even if the pace moderates."
In a separate note, Barclays warned that disruption to fertiliser supplies and the growing risk of a 'Super El Niño' weather system could combine to hit global crop yields in 2027.
Cocoa, coffee and rice were identified as the most exposed commodities, with risks concentrated in Sub-Saharan Africa and parts of Southeast Asia.
12.45pm: Petrol prices rebounding
Petrol and diesel prices have started edging higher after wholesale oil costs rebounded last week.
The average price of unleaded petrol topped 159.53p a litre back in May, before falling to an average of 150.59p last Monday, but over the weekend bounced back up to 151.19p, the RAC says.
Driving yesterday, I saw prices around 153p a litre.
"Pump prices have started rising again on the back of last week’s increase in the cost of oil, meaning the savings drivers have been benefitting from recently could start to disappear," says RAC head of policy Simon Williams.
"Drivers embarking on their summer getaways may well see slightly higher forecourt prices again, with both petrol and diesel likely to go up a couple of pence a litre more in the next week or so.
"The fate of pump prices here in the UK once again rests on whether there are further attacks between the US and Iran."
12.11pm: FTSE just under water
The FTSE was down around 25 points in a short while ago but is now back close to flat again.
Biggest fallers are IG Group, perhaps on the back of the update from rival Plus500; down 3.65%; British Airways owner IAG is down 2% as oil prices rebound; Polar Capital Tech Trust and Scottish Mortgage are both down around 1.6% as tech stocks are expected to see the brunt of selling in New York later.
Others include Standard Chartered, AstraZeneca, St James's Place, BAT and Fresnillo.
Gold and silver are down 1.3% and 2.3% as the dollar holds steady on the fighting in the Middle East.
Gold has been trading rangebound between $4,000-4,200/oz over the past month, notes John Meyer at SP Angel.
"Steady pressure to the downside has been maintained by a stronger US dollar. Additionally, limited clarity on the future direction of the US-Iran war is reducing confidence in bullion purchase."
Base metals have fallen on the stronger US dollar, "as investors see higher-risk to global growth from ongoing conflict in the Strait of Hormuz", though the Footsie's big miners are marginally higher right now.
11.41am: Burnham expected to be confirmed on Friday
UK political developments will be on investors' radars this week, with Andy Burnham expected to be confirmed as party leader on Friday, putting him on course to enter Number 10 as new Prime Minister the following week.
His becoming the new PM been largely priced in by the market, says Susannah Streeter at Wealth Club and "investors appear relatively sanguine", with Gilt yields edging back slightly before the recent ramp higher induced by the fresh exchanges of attacks in the Middle East.
"Overall, it suggests bond markets don't currently see a Burnham premiership as a material threat to fiscal stability; however, some uncertainty will still linger."
Enrique Díaz-Alvarez, chief economist at Ebury, says the pound "continues to outperform" the euro, which is "somewhat puzzling to us given the elevated political risk premium in Britain".
He sees markets as "taking a fairly optimistic view" of an Andy Burnham premiership.
"Burnham has been quite vague about his intended economic policies, however, and we think that markets are underestimating the fiscal risks posed by his preference for greater spending, which we expect to be funded by a mix of both higher rates of taxation of increased gilt issuance."
The first key item for markets will be Burnham's pick for chancellor, which is expected to be announced on his first full day in office next Monday.
Ed Miliband remains the clear front-runner, with his chgances seen at almost 70% on predictions markets.
"This may upset markets given that his appointment would likely herald a return to borrow-and-spend Labour policy," says Diaz-Alvarez, who sees Yvette Cooper as "the most reassuring of the plausible alternatives".
11.04am: Can markets absorb Gulf risks?
This week "will be a test to see if the continued skirmishes between the US and Iran can be absorbed by financial markets without causing major damage", says market analyst Kathleen Brooks at XTB.
Oil prices are up but, as pointed out below, feel "contained" below the highs seen in recent months and "the prevailing view is that the current situation will not evolve into another full-scale war, even if President Trump believes that the ceasefire is over", says Brooks.
With South Korea's Kospi sharply lower and US futures pointing to a lower open later today, led by the Nasdaq, with the Dow Jones seen flat, this "suggests that the rise in geopolitical tensions and the spike in the oil price are disrupting the momentum trade once again, which will hit the tech trade and the chip stock rally".
The reasons that geopolitical risks hit chip stocks and tech stocks more than other sectors of the market, are twofold, Brooks says.
Firstly, the chip trade is big in the retail community, especially in Asia, where leveraged ETFs can magnify the sell-off.
Second, rising geopolitical tensions lead to risk aversion, which leads to many investors cutting their most profitable trades, which are South Korean equities and global chip stocks.
10.26am: Computacenter still basking in last week's glow
Computacenter shares are among the top Footsie risers as investors and analysts continue to look fondly at its half-year trading statement from the end of last week.
The consensus forecast has increased around 7% for this year's profits, says Harvey Robinson at Panmure Liberum, and by circa 4% for the 2027 financial year.
"Growth in committed backlog has improved visibility and despite a strong comparative period in H2 they are more confident.
"Most of the beat is driven by the US (AI-driven Data Centre demand), but the UK business has been performing much better, and an election-related slowdown earlier in the year in Germany has largely unwound.
"We upgrade our forecasts in line with the new guidance. We downgraded from 'buy' to 'hold' in January with the guidance upgrade, and this was clearly a mistake. We increase our target price to 4080p to reflect the upgrades and the improved growth."
9.58am: Stocks inch higher
The FTSE 100 dropped into the red for about an hour but is now up 15 points at 10,512, with other Continental benchmarks also inching into the green.
Dow Jones futures are in positive territory too, though those for the Nasdaq are still pointing to losses.
In the background, Brent crude has dropped to below $78 a barrel.
Top risers on the London index include several telecoms companies and housebuilders, with Vodafone, Persimmon, BT, Airtel Africa, and Barratt Redrow.
Heavyweights BP and Shell are up there too, benefiting from the higher oil prices, says market analyst Dan Coatsworth at AJ Bell.
He says housebuilders are "mounting a recovery" from the lows reached after last week’s big profit warning from Vistry.
"Miners, airlines and tech investment vehicles including Polar Capital Global Technology and Scottish Mortgage were among the main losers in London."
9.29am: Movers
PageGroup shares have leapt almost 11% on the recruiter's improvement in profits in the second quarter.
Analyst Sanjay Vidyarthi at Panmure Liberum says the 0.2% fall in Q2 constant currency profit was a strong beat to a City consensus forecast of a 5% decline.
He forecasts that full-year gross profit will be down 3.8%, with a EBIT forecast of £27.4 million and the consensus estimate of £27.8 million.
"The perm focus means that Page is heavily geared into the cycle, but it remains too early to call the estimate inflexion point," he says.
Elsewhere, Me Group International lathered up 13% as the photo booths and laundry vending machine operator said it remained on track to meet revised full-year expectations despite weaker consumer spending in April.
Vending revenue returned to more normal levels from May and the improvement continued into June.
Shares in Oxford Nanopore are down 16% after the DNA and RNA analysis specialist revealed first-half trading below management expectations.
The shortfall principally reflected sharp declines in two regions, with China down 16% due to tighter export control restrictions and changes to the company's commercial operations there, while sales in the Middle East dropped about 14%.
8.59am: Oil prices soften
Oil prices have eased a little in the past hour, with Brent crude softening to $78.75, having topped $79.70 earlier in the morning.
It comes as Iran's foreign ministry said the ceasefire is in a "crisis phase" and the country will abandon the agreement if the US does not uphold its obligations.
Tehran is trying to agree a joint mechanism with Oman for the Strait of Hormuz, spokesman Esmail Baghaei said at a news conference, according to wire reports, but US pressure on Muscat has hindered its efforts.
He also said pursuing justice for the assassination of Ayatollah Ali Khamenei is "a serious principle" for the Islamic Republic. "We will use all legal and international tools and opportunities at the international level to document their [US-Israeli] crimes and to pursue the implementation of justice," he added.
It comes after Iran claimed attacks on US military sites in Bahrain, Kuwait, Oman and Jordan in retaliation for Washington’s latest bombardment.
The US military confirmed strikes on Iran had been aimed at reducing Tehran’s capacity to attack civilian vessels navigating Hormuz.
8.32am: Market analysis
US strikes and Iranian counterstrikes across the Gulf region have "pushed markets into a classic inflation-shock posture: crude higher, equities lower, the dollar firmer, and rate-cut hopes pushed further out of reach," says market analyst Patrick Munnelly at Tickmill,
"The immediate market reaction is ugly," he adds, with stocks in Asia and Europe in the red, along with US futures.
Tech stocks in Japan and Korea plunged, including SK Hynix dropping 13% in Seoul despite a strong debut for its US-listed ADRs as they rallied 13% on their first trading day last Friday.
"Hormuz is the market’s pressure point," says Munnelly. "Shipping volumes had not recovered to pre-conflict levels even before the latest escalation, so the issue is not whether the strait is fully open or fully closed.
"The issue is that control looks far from settled. In energy markets, uncertainty around the world’s most important transit route is enough to keep a persistent risk premium in crude."
He adds that "perspective matters", as Brent around "well below" the $95 average seen since the conflict began at the end of February and far below the levels above $100 seen in May.
"That matters for the bond-market interpretation. If 10-year Treasury yields just north of 4.5% were consistent with oil above $100, they are not obviously too low with oil near $79, especially with some firmer US employment signals still in the mix."
The composition of the bond moves matters, he says, with 2-year Treasuries rising more than 10-year.
"In plain English, markets are not simply marking up future inflation. They are removing rate cuts, adding the possibility of hikes, and demanding a higher real return to hold duration."
8.15am: FTSE 100 opens higher as BP and Shell lifted
The FTSE 100 has started the week higher, up 30 points to 10,528 as oil producers BP and Shell gained from the rise in oil prices.
In opening trades, BP and Shell were up 2.7% and 1.6% respectively.
This was not the only driving force, with widespread advances as two-thirds of the index's shares are in positive territory.
Computacenter, Vodafone and BT were among others up at least 1%, along with housebuilders Persimmon and Barratt Redrow despite rising bond yields.
7.57am: PageGroup reports 'signs of normalisation'
PageGroup has also maintained its full-year guidance after reporting an improvement in profits in the second quarter, as growth in the Americas and Asia Pacific offset continued weakness in the UK, France and Northern Europe.
The FTSE 250-listed recruiter revealed second-quarter gross profit of £197.6 million, up 1.3% year-on-year but down 0.2% on a constant currency basis. That marked an improvement from the 4.9% constant-currency decline in the first quarter.
About half of the group's markets returned to growth during the quarter, with the Americas delivering a seventh consecutive quarter of growth, while Asia Pacific recorded a fifth straight quarter of expansion.
Chief exec Nicholas Kirk said that despite the "signs of a normalisation" seen in a number of markets, he highlighted "a high degree of uncertainty in the outlook for the rest of the year".
7.32am: Plus500 reports strong top line
Plus500 has backed its full-year outlook after reporting its highest half-year revenue in three years, helped by expansion in the US and stronger trading activity.
First-half revenue for the FTSE 250-listed trading platform operator came in at $462.9 million, up 12% compared to the previous year, while customer income increased 24% to a five-year record of $460.8 million.
Underlying profits (EBITDA) edged up 1% to $187.5 million as the group increased spending on customer acquisition and investment in its US business, resulting in an EBITDA margin of 41%, down from 45% a year ago.
FTSE 100 Live pre-open
Futures for London's blue-chip index and those in Europe and the US are all in the red on Monday, as oil prices were ratcheted higher after the US launched more strikes on Iran, which in turn said it has closed the Strait of Hormuz.
The FTSE 100 has been called 25 points lower on Monday, following a loss across the past week of 181.74 points or 1.7% from the four-month highs reached at the start of the month.
Across the pond, futures are pointing to a 1.3% fall for the tech-heavy Nasdaq index, while the Dow Jones and S&P 500 are seen dropping 0.35% and 0.55%.
Asian markets are mostly in the red, with Japan's Nikkei and Korea's Kospi down 1.9% and 7.6%, with the Hang Seng currently just above flat in Hong Kong.
"Since Friday night, the US–Iran conflict has intensified sharply," says Deutsche Bank strategist Jim Reid, "with Washington launching multiple rounds of strikes targeting Iranian air defences, radar systems and missile and drone capabilities, while Tehran has responded with attacks across the region and against shipping.
"The exchange has increasingly centred on the Strait of Hormuz, where Iran has claimed the waterway is effectively closed and warned vessels against transiting, even as US officials insist it remains open and are actively escorting commercial traffic."
Strikes on military and energy sites across the Gulf have been reported, which Reid says underscores the "widening scope of the conflict".
Oil prices have shot up, with Brent rising 4.3% to $79.25 a barrel, its highest in over three weeks., and US and other government bond yields have inched up.
