The FTSE 100 closed lower on Monday amid reports Iran has suspended peace talks with the US.
The FTSE 100 closed down 70.33 points, 0.7%, at 10,338.95. The FTSE 250 ended down 179.99 points, 0.8%, at 23,245.78, while the AIM All-Share fell 2.01 points, 0.2%, to 819.24.
Iranian news agency Tasnim reported on Monday that Tehran had suspended dialogue with mediators in protest against Israel’s expanding Lebanon offensive. The move came hours after Iran again exchanged strikes with US forces despite a weeks-long ceasefire.
Tasnim reported that “the Iranian negotiating team is suspending dialogues and exchange of texts through mediators”, blaming Israel’s actions in Lebanon.
Any resumption in talks was dependent on Israel ending its military operations in Gaza and Lebanon and the “complete withdrawal from the areas occupied by the Zionists in Lebanon”, Tasnim said.
The report said Iran would continue to block the Strait of Hormuz and “activate other fronts, including the Bab al-Mandab Strait” at the entrance of the Red Sea.
Brent crude for August delivery traded higher at 97.22 dollars a barrel on Monday, up from 91.62 dollars at the time of the equities close in London on Friday.
In European equity markets on Monday, the CAC 40 in Paris ended down 0.5%, and the DAX 40 in Frankfurt closed 0.4% lower.
In New York, the Dow Jones Industrial Average was down 0.3%, the S&P 500 was flat, and the Nasdaq Composite firmed 0.2%.
Back in the UK, fresh survey data offered some support. S&P Global said UK manufacturing activity expanded at its fastest pace in four years in May, though firms continued to face mounting cost pressures and supply chain disruptions linked to conflict in the Middle East.
The S&P Global UK manufacturing purchasing managers’ index rose to 53.9 points in May from 53.7 in April, reaching its highest level since 2022 and remaining comfortably above the 50-point threshold that signals growth. The reading was also above the flash estimate of 53.7 published on May 21.
The pound traded at 1.3447 dollars on Monday afternoon, down from 1.3479 dollars on Friday. Against the euro, sterling firmed to 1.1570 euros from 1.1543 euros on Friday.
The yield on the US 10-year Treasury widened to 4.51% on Monday from 4.43% on Friday. The yield on the US 30-year Treasury stretched to 5.01% from 4.97%.
The euro traded lower against the greenback, at 1.1624 dollars on Monday against 1.1680 dollars on Friday. Against the yen, the dollar was trading at 159.64 yen, higher than 159.15 yen.
Gold traded at 4,472.82 dollars an ounce on Monday, down from 4,584.74 dollars on Friday.
On the FTSE 100, the oil price gains boosted shares in BP and Shell, up 2.7% and 2.5% respectively.
On the FTSE 250, Bluefield Solar Income Fund jumped 16% as it agreed a £548 million cash offer from Drax, which implies an enterprise value of £1.08 billion.
Drax’s offer sees Bluefield investors receiving 92.57p in cash for each share held, in addition to keeping the second interim dividend of 2.25p per share, which is payable on or around June 15.
Applied Nutrition climbed 12% as it raised full-year guidance, announced a tie-up with Mondelez International and an acquisition in the US.
The Merseyside-based wellness brand now expects revenue for the financial year ending July 31, excluding Nutrablend Group, of around £148 million, ahead of market expectations of £140.3 million, and up 38% from £107.1 million the year prior.
In addition, the firm said it is paying 16 million dollars cash for US-based manufacturer Nutrablend. The acquisition includes a manufacturing and warehousing facility in Buffalo, New York, with the capacity to support up to 300 million dollars in annual revenue.
EasyJet rose 10% after Minneapolis-based asset manager Castlelake confirmed that it was considering a possible offer for the airline.
Castlelake, which holds a 2.1% stake in the FTSE 250-listed company, said if it was to make an offer, it would be at no less than 403.23 pence per share.
Responding to the approach, easyJet on Monday said it has “not had any discussions with, nor received any approach or proposal from Castlelake”.
JPMorgan analyst Harry Gowers said Castlelake’s interest is “credible” given it has a history in the European airline sector and a specialism in asset-based investing – including aviation. It has also provided financing to Virgin Atlantic, he noted.
But easyJet called the timing of the approach “highly opportunistic” given the share price is “temporarily depressed”.
The airline also highlighted the “considerable” regulatory, financial and other execution challenges associated with a potential takeover.
ME Group International plunged 27% as it said it is taking a “more cautious” view of the full-year outlook amid softer trading, particularly in its French photobooth and laundry businesses.
The Epsom-based service equipment provider attributed the softening in revenue to a shift in consumer spending patterns driven by lower consumer confidence due to the Middle East war.
ME Group now expects full-year 2026 pre-tax profit to be in the range of £69 million to £74 million compared with £78.2 million in the financial year to October 2025.
ME Group’s broker Peel Hunt lowered its pre-tax profit forecast to £70.0 million for financial 2026 from £80.0 million before. For the following financial year, the broker projects pre-tax profit of £80.0 million, down from £88.0 million previously.
The biggest risers on the FTSE 100 were Sage Group, up 65.20p at 907.60p, Entain, up 29.00p at 560.60p, Experian, up 103.00p at 2,676.00p, Relx, up 93.00p at 2,543.00p and Glencore, up 20.30p at 588.10p.
The biggest fallers on the FTSE 100 were Persimmon, down 60.00p at 1,053.50p, BAE Systems, down 102.00p at 1,921.00p, Rolls Royce, down 64.60p at 1,272.80p, Babcock International, down 50.50p at 1,046.00p and 3i, down 96.00p at 2,179.00p.
Tuesday’s global economic calendar has eurozone inflation figures and UK money supply data.
Tuesday’s local corporate calendar has a trading update from Dunhill and Lucky Strike owner British American Tobacco and full-year results from water utility Pennon.
Contributed by Alliance News