16th Jun 2025 07:47
(Alliance News) - Stocks were called higher in London on Monday as the conflict between Israel and Iran continues.
"An Iranian gas field in the Persian Gulf was hit on Saturday, fueling concerns that the escalation could spill over into global energy markets," Swissquote's Ipek Ozkardeskaya commented. "While the damage appears limited to Iran's domestic supply, the targeted gas processing facilities are linked to offshore oil production sites, potentially threatening broader energy flows."
Looking to the week ahead, she noted: "On Wednesday, the Federal Reserve [Fed] is also expected to hold rates steady. A cut before the September meeting appears unlikely. Officials are likely to remain cautious given trade-related uncertainties and may want to observe how potential tariffs affect inflation. Strong labour market data gives them breathing room."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 13.2 points, 0.2%, at 8,863.83
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Hang Seng: up 0.3% at 23,957.30
Nikkei 225: up 1.2% at 38,287.31
S&P/ASX 200: marginally higher at 8,548.90
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DJIA: closed down 769.83 points, 1.8%, at 42,197.79
S&P 500: closed down 1.1% at 5,976.97
Nasdaq Composite: closed down 1.3% at 19,406.83
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US 10-year Treasury yield: 4.44% (4.42%)
US 30-year Treasury yield: 4.93% (4.90%)
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EUR: lower at USD1.1548 (USD1.1560)
GBP: lower at USD1.3567 (USD1.3591)
USD: higher at JPY144.14 (JPY144.01)
GOLD: lower at USD3,413.55 per ounce (USD3,427.50)
OIL (Brent): higher at USD74.56 a barrel (USD73.61)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
10:00 BST eurozone labour cost index
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The escalating conflict between Israel and Iran is likely to be high on the agenda as world leaders gather in Canada on Monday. UK Prime Minister Keir Starmer said that the G7 meeting in Alberta would provide an opportunity for allies to make the case for de-escalation in the "fast moving" situation in the Middle East, with Donald Trump among those set to attend. Leaders have been urging calm in recent days since Israel first launched strikes against Iran before the weekend, with Starmer having held calls with Trump, French president Emmanuel Macron and German chancellor Friedrich Merz among others. Starmer called for "restraint and de-escalation" during a bilateral meeting with Italian Prime Minister Giorgia Meloni in Kananaskis, Canada on Sunday evening. In a readout of the meeting, a Number 10 spokesperson said: "Discussing the situation in the Middle East, the prime minister urged restraint and de-escalation. The devastating human toll as well as the potential global economic impact caused by rising global oil prices cannot be underestimated, the leaders agreed. They added that this summit comes at a vitally important moment for the world, and that G7 partners must find a way forward through diplomacy."
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Iran vowed Monday to carry out more "devastating" operations against Israeli targets as Tehran struck its arch-foe with a barrage of missiles. Iran's Revolutionary Guards, in a statement quoted by the official IRNA news agency, warned that "effective, targeted and more devastating operations against the vital targets" in Israel "will continue until its complete destruction".
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UK public procurement rules are set to be overhauled as ministers unveil their 10-year-plan for infrastructure this week. The strategy to overhaul infrastructure over the next decade comes as Chancellor Rachel Reeves has said the country's schools and hospitals have been "left to crumble". The Treasury has promised hundreds of billions over the next decade for projects such as roads, railways and homes. Under proposals put forward in a Cabinet Office consultation, public bodies would have to give more weight to firms which can prove they will boost British jobs when they are bidding for contracts.
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Tax increases and the rise in the minimum wage have cost each UK pub about GBP14,000 on average, according to the latest figures from an industry body. The impact of rises in national insurance contributions, the national minimum wage, business rates for some companies and packaging taxes have wiped out the equivalent of 12 days of pubs' turnover, the British Beer & Pub Association said.
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BROKER RATING CHANGES
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Jefferies cuts Mitie to 'hold' (buy) - price target 145 pence
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Berenberg cuts Energean to 'hold' (buy) - price target 1,000 pence
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Berenberg raises Adriatic Metals price target to 268 (180) pence - 'hold'
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COMPANIES - FTSE 100
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Entain released upgraded guidance for its BetMGM business, jointly owned with MGM Resorts International. "BetMGM's positive momentum seen during 1Q 2025 has continued for the period 2Q 2025 to 13 June 2025, with strong net revenue growth across both iGaming and Online Sports," the sports betting and gambling company said. It added that trading in the quarter was "broadly consistent" with the prior year's net revenue growth. As a result, Entain said it now expects full-year net revenue of at least USD2.6 billion, up from the previous guidance range of USD2.4 billion to USD2.5 billion. It expects adjusted Ebitda of at least USD100 million, up from its previous forecast of "Ebitda positive". "BetMGM remains excited about the significant opportunities ahead," Entain said. "Its strengthened business, revised strategic approach, and performance momentum, further reinforce its confidence in future growth prospects and pathway to USD500 million Ebitda in the coming years."
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COMPANIES - FTSE 250
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NextEnergy Solar Fund released its full-year results. For the year ended March 31, dividends totalled 8.43p per share, up from 8.35p the year before. The firm reconfirmed its full-year dividend target guidance for the year ending in 2026, also of 8.43p per share. As of March 31, the net asset value was 95.1p, down from 104.7p at the same time one year prior. Net asset value per share total return was minus 1.1% in financial 2025, unchanged from a year ago. "This year has not been easy for NESF, our shareholders, and the wider investment company sector," said Interim Chair Paul Le Page. "We have seen continued pressure on our share price discount to net asset value which averaged c.27% throughout the 12-month period but we are pleased to see the start of a recovery since the company's discount hit an all-time high in January 2025. The sustained discount has been driven by multiple macroeconomic factors which are outside of the company's immediate control; this has resulted in negative sentiment towards the entire alternative investment company sector." The firm added: "The UK has one of the most mature solar markets in the world, growing by 7% to around 18GW over the 2024 calendar year. The UK government has demonstrated its support for solar and renewable technologies through its comprehensive industrial policy where one of its goals is to increase renewable energy capacity for the UK to be a clean energy superpower by 2030."
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OTHER COMPANIES
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Abu Dhabi's state-owned oil company is leading a takeover bid for Adelaide, Australia-based energy group Santos, valuing it at USD18.7 billion, Santos said Monday. Santos's board said it plans to unanimously recommend the Abu Dhabi National Oil Co's offer to shareholders if it can agree on the takeover terms. Santos has energy operations in Australia, Papua New Guinea, East Timor and the US, and is a major supplier of liquefied natural gas in Australia and Asia. The ADNOC all-cash takeover offer amounts to USD5.76 for each Santos share, equivalent to USD18.72 billion for the entire company. The price per share is 28% higher than Santos' closing level on Friday. Santos shares jumped 11% to AUD7.73 each in Sydney on Monday morning. The Australian firm said its board "intends to unanimously recommend that Santos shareholders vote in favour of the transaction" if it can agree on terms and there is no better offer.
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Costain announced its intention to launch a GBP10 million buyback programme, following the valuation of its defined benefit pension scheme, which is in surplus for a second consecutive year. Also, ahead of its half-year results, Costain confirmed that trading remains in line with the board's expectations for 2025. "The group retains a strong, high-quality forward work position that is more than four times annual revenue and is busy bidding further new work across all sectors," the construction and engineering firm said. Costain said it is on track to meet its 4.5% adjusted operating margin run rate target during 2025, and plans for its first-half dividend to be around 33% of the full year dividend. "Over the past three years we have executed on our strategic plans, improved the quality and size of the group's contract portfolio, delivered on our margin targets, significantly strengthened our net cash position and successfully refinanced our bank and bonding facilities, giving the group the financial strength and capability to support its future growth opportunities," commented Chief Executive Alex Vaughan.
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By Emma Curzon, Alliance News reporter
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MitieEnergean Oil & GasAdriatic Metal.EntainNextEnergy SolarCostain