The FTSE 100 ended in the red on Monday as oil prices rose amid renewed tension in the Middle East and housebuilders fell after weak mortgage approval figures.
The FTSE 100 closed down 23.80 points, 0.2%, at 10,484.22. The FTSE 250 ended down 132.34 points, 0.6%, at 23,014.85, and the AIM All-Share fell just 0.24 of a point to 770.11.
In European equity markets on Monday, the CAC 40 in Paris ended down 0.2%, as did the DAX 40 in Frankfurt.
In New York, the Dow Jones Industrial Average was up 0.4%, the S&P 500 rose 0.6%, and the Nasdaq Composite was 1.0% higher.
Oil prices edged higher after the US and Iran exchanged fire over the weekend. While the US said it had agreed with Iran to halt the attacks and continue talks, the strikes disrupted shipping through the vital Strait of Hormuz over the weekend.
Brent crude for August delivery traded higher at 72.85 dollars a barrel on Monday, up from 71.49 dollars on Friday.
Russ Mould, investment director at AJ Bell, said the scale of the oil price hike “wasn’t as bad as it could have been”, although investors “will want greater reassurance that the ceasefire is lasting and not a flash in the pan”.
Sterling climbed higher as Andy Burnham set out policy plans in his first major speech since launching a leadership bid, which may see him become prime minister.
Mr Burnham promised to give the UK a “new direction” with the biggest transfer of power out of Whitehall in modern times.
Barclays said the most telling thing from a market perspective was Mr Burnham’s commitment to the existing fiscal rules.
“There was no sense of trying to find ways to game the rules or increase borrowing, which would have worried markets,” the broker said.
There was no detail on Cabinet positions, including chancellor, which Barclays says likely means another “three weeks of speculation and plenty of scope for the front-runner/decision to change”.
The pound traded at 1.3247 dollars on Monday afternoon, higher from 1.3216 dollars on Friday. Against the euro, sterling firmed to 1.1597 euros from 1.1588 euros on Friday.
The euro traded higher against the greenback, at 1.1422 dollars on Monday against 1.1406 dollars on Friday. Against the yen, the dollar was trading at 161.93 yen, up from 161.64 yen on Friday.
The US 10-year Treasury yield traded at 4.39% on Monday, widening from 4.37% on Friday. The US 30-year Treasury yield was flat at 4.86%.
Housebuilders were lower in London on Monday, as figures from the Bank of England showed that UK mortgage borrowing slowed sharply in May.
Net borrowing of mortgage debt by individuals fell to £2.9 billion in May from £4.4 billion in April. This was below the previous six-month average of £5.1 billion and marked the weakest monthly borrowing since May 2025, when net lending totalled £1.9 billion.
Net mortgage approvals for house purchases, a leading indicator of future borrowing, fell to 56,200 in May from 66,000 in April, below the FXStreet consensus forecast of 63,000.
The figure was also below the previous six-month average of 63,300 and marked the lowest level since December 2023.
“The sharp monthly reversal is a warning shot. Mortgage approvals typically translate into housing transactions with a three-to-four-month lag, which means May’s softness will feed through to sales completions in late summer and early autumn,” said RBC Capital Markets analyst Anthony Codling.
“For housebuilders juggling the trade-off between pricing and volume, this data nudges them back towards caution.”
He added: “Housebuilders will be watching June’s data closely to see whether May was an aberration or the start of a more meaningful cooling.”
On the FTSE 100, Persimmon shares fell 2.5% while Barratt Redrow slid 2.2%. On the FTSE 250, Vistry sunk 4.2%, Bellway lost 2.1%, Taylor Wimpey was 2.5% lower and Berkeley Group fell 2.1%.
Lion Finance climbed 2.2% as JPMorgan raised its share price target to 13,900p from 13,100p after an investor day in Tbilisi.
This showcased “its high-quality franchise” and highlighted the “runway for deeper customer penetration in both Georgia and Armenia”, JPMorgan said.
The weak gold price weighed on Fresnillo and Endeavour Mining, down 3.0% and 2.9%, respectively.
The yellow metal traded at 4,023.68 dollars an ounce on Monday, down from 4,085.63 dollars on Friday.
Babcock International led the FTSE 100 fallers, with shares down 5.2% amid reports the Government has dropped plans for an advanced warship that the defence group was vying to develop.
While British American Tobacco fell 0.7% after it said its Fit2Win transformation programme is on track, impacting around 9,000 roles globally.
The London-based cigarette and nicotine product maker said the programme, which was launched last year, remains on target to achieve around £600 million in annual cost savings by 2028.
As part of the efficiency drive, BAT said it expects changes to result in a reduction of around 5,500 roles globally by the end of the year, excluding the US, which it noted is not within the scope of the programme.
On the FTSE 250, Bridgepoint Group jumped 16% after it struck a deal to acquire a real estate investment platform, taking the private equity firm to around 120 billion dollars in assets under management.
The London-based private equity investment manager is to buy Kayne Anderson Real Estate in a deal worth 1.39 billion dollars upfront. Bridgepoint will pay 759 million dollars in cash and issue 189 million new shares, worth 634 million dollars.
The deal is expected to close at the end of the year. It will boost Bridgepoint’s earnings per share by a mid-single-digit percentage in 2027 and then by more than 20% in 2028. In 2025, Bridgepoint achieved basic earnings per share of 5.0p, down from 8.0p in 2024.
The biggest risers on the FTSE 100 were Metlen Energy & Metals, up 1.16 at 42.20p, Entain, up 13.60p at 591.40p, Lion Finance, up 240.00p at 11,110.00p, SSE, up 38.00p at 2,459.00p and Experian, up 31.00p at 2,551.00p.
The biggest fallers on the FTSE 100 were Babcock International, down 50.00p at 921.00p, Fresnillo, down 87.00p at 2,781.00p, Endeavour Mining, down 113.00p at 3,739.00p, Persimmon, down 27.50p at 1,082.00p and Anglo American, down 91.00p at 3,627.00p.
Tuesday’s global economic calendar has GDP prints in the UK and Canada plus inflation data in France and Germany.
Tuesday’s local corporate calendar has a trading statement from grocer J Sainsbury and cream celebration cakes retailer Cake Box.
Contributed by Alliance News