- FTSE 100 closes 39 points lower at 10,862.50
- Wall Street headed for muted start
- Vistry drops 9%
- Legal & General cut by Citi
- Drinks group downgraded
Close: Dull start to the week
London shares closed a very dull open to the week off their session low. The finishing print was 10,862.50, off 39 points.
3.15pm: Quiet open
The FTSE 100's mid-summer malaise continued, the index 55 points lower with no sign of anyone stepping in to arrest the drift.
New York's opening bell offered little encouragement, the Dow, S&P 500 and Nasdaq Composite all slipping below the flat line despite sitting close to record highs.
Brent has crept up to $85 a barrel as Iran teases that a deal to open the Strait of Hormuz is very close, a phrase traders have heard rather too often by now.
2.05pm: Punters cool on Fed cut
Prediction market traders have all but abandoned bets on a Federal Reserve rate cut this year, despite figures showing the US economy shed jobs in July.
Polymarket now puts the probability of no change at the September meeting at 64%, with a quarter-point increase the only serious alternative at 35%.
A cut of any size is priced at 3% combined, down sharply over the past month, on a market that has traded more than $21 million.
A labour market going backwards
That is a striking way to read a payrolls report that came in more than 100,000 jobs below expectations.
Nonfarm payrolls fell by 23,000 in July against forecasts of an 83,000 gain, the Bureau of Labor Statistics said on Friday.
Worse, May and June were revised down by a combined 103,000, dragging the 12-month average to just 34,000 a month.
Local government education accounted for 50,000 of the losses, with leisure and hospitality down 40,000, retail down 19,000 and financial services down 14,000.
Health care remained the reliable engine, adding 22,000, though below its recent run rate.
The unemployment rate fell to 4.1% from 4.2%, but for the wrong reasons.
The labour force shrank by 264,000, pushing participation to 61.4%, the lowest outside the pandemic since 1976, while the employment-to-population ratio slipped to 58.9%.
1.10pm: No direction
The FTSE 100 was going nowhere fast ahead of the opening bell on Wall Street, 20 points below the gain line. Wall Street is doing much the same, with futures barely budging even as the American indexes sit within touching distance of record highs.
The hesitancy is understandable given what is coming.
Wednesday brings the US consumer price index, the reading that could settle an argument the Federal Reserve is still having with itself over whether to raise rates as the Middle East oil shock feeds through to prices.
Friday's weak jobs report took some heat out of that debate, though policymakers insist a hot inflation print would put a rise back on the table.
Brent is hovering around $84 a barrel amid another round of will-they, won't-they over the Strait of Hormuz.
Later, CoreWeave, Nebius, Cerebras and Super Micro report on the AI build-out.
12:15pm: Fizz goes from Coca-Cola HBC
The FTSE was off 33 points just after midday, with Coca-Cola HBC leading the list of losers. The drinks and logistics group was prompted by a downgrade from BNP Paribas, which cut its call to 'neutral'.
Elsewhere, Deutsche Bank has upgraded Persimmon to 'buy' from 'hold', arguing that share price weakness has left the housebuilder too cheap despite a run of forecast downgrades.
Chris Millington nudged his target price down to 1,403p from 1,419p, still implying about 20% upside from the last close of 1,166.5p.
The analyst described the interim figures as robust, with 13% volume growth doing enough work to absorb 210 basis points of gross margin pressure and deliver a 3% rise in pre-tax profit.
Persimmon expects to face the same build cost inflation squeezing the rest of the sector, but management intends to offset it progressively through self-help measures and continued top-line growth.
Millington has cut his pre-tax profit forecasts by 3% for this year, 13% for 2027 and 14% for 2028 to reflect the updated guidance.
11.02pm: Crude bubbles higher
Crude is grinding higher again, with Brent for October delivery at $84.46 a barrel, up 1%, leaving the benchmark roughly 16% above where it sat before the US and Israeli campaign against Iran began.
The sticking point remains the same one that has whipsawed the market for weeks.
James McCormack and James Midgley at Cavendish note that futures have been highly sensitive to headlines around the terms and timing of a potential pact on the waterway, which could restore millions of barrels of Middle Eastern supply.
Lifting the blockade would return a significant volume of oil to the market and potentially pave the way for a full resumption of flows through Hormuz.
The snag is that even as a resolution looked more imminent, threats to shipping persisted.
Tehran said talks with Oman were nearing agreement but warned any arrangement would not mean an immediate reopening, while rejecting direct negotiations with Washington for now.
The Cavendish pair also flag a widening conflict, with Iran-backed Houthis claiming a large-scale attack on Yemen's Saudi-aligned government forces.
9.45am: L&G downgraded
Legal & General shares slipped 1.7% after Citi pulled the rug, cutting the insurer to sell from neutral purely on valuation.
The note follows first-half results and trims remittance forecasts for 2026 and 2027 by 4.5%, reflecting lower pension buyout volumes written at a thinner accounting margin.
That is partly offset by stronger asset management profits, helped by a lower cost-income ratio and an extra £100 million a year from asset optimisation actions.
Citi's target price comes down 2.3% to 245p, implying a negative expected total return of 15.4% from current levels.
Core operating earnings per share are still seen growing 8% this year, a shade under the 9% the company itself has guided towards.
Dividend estimates are unchanged at 6.24p for the first half and 21.8p for the full year.
The snag, in the bank's view, is simply that the stock has already run 19% higher in 2026.
8.15am: Blue-chips nudge into the red
London's shares got off to a slow start at the height of the holiday season for the Square Mile.
Shares nudged 12 points lower to 10,889.04 in the first 15 minutes of trading, ignoring the upbeat mood in Asia earlier.
Corporate news was limited to the mid- and small-cap arena after a flurry of blue-chip updates last week.
The morning's big early mover was Vistry, the housebuilder, amid reports its credit insurance cover has been cut.
Dull start predicted
The FTSE 100 has been around 41 points lower, after closing Friday at 10,901.09, ignoring the buoyant mood in Asia and a positive end to the week in the US.
Wall Street finished Friday with the S&P 500 at a fresh record high and the Nasdaq up more than 1%, after US jobs figures came in weak enough to take the sting out of expectations for another Federal Reserve rate rise.
The Bureau of Labor Statistics reported 23,000 jobs lost in July, with growth in May and June revised down for good measure.
Odds on an increase in September have been slashed to about 43% from 64% a week ago, according to Bloomberg.
Asia picked up the baton, with Tokyo climbing 2% on the back of Kioxia, Tokyo Electron and Advantest, while Seoul rallied as SK hynix and Samsung joined the chipmaker charge.
Hong Kong, Taipei, Shanghai, Wellington and Jakarta all pushed higher.
The catch, as so often this summer, is crude.
Oil jumped around 1% after Iran's Revolutionary Guards insisted on Sunday that the Strait of Hormuz stays shut until Washington meets a list of demands, puncturing hopes that the Middle East crisis is winding down.
Higher crude tends to flatter London's heavyweight energy names, but the inflationary read-through is what is unsettling everyone else.
The dollar, meanwhile, has clawed back Friday's losses and kept gaining on the yen, which surged earlier this month after US and Japanese authorities staged a rare joint intervention to support it.
