15th Jun 2026 17:05
(Alliance News) - The FTSE 100 gave back early gains in the wake of the US-Iran peace deal on a mixed day for stocks in London on Monday.
The FTSE 100 closed down 41.10 points, 0.4%, at 10,430.62. It had earlier traded as high as 10,570.09.
The FTSE 250 ended up 36.91 points, 0.2%, at 23,362.62, while the AIM All-Share shot up 17.96 points, 2.3%, to 805.29.
The Cboe UK 100 ended down 0.2% at 1,035.96, the Cboe UK 250 was 0.1% lower at 20,076.22, and the Cboe Small Companies Index fell 0.8% at 18,593.68.
London's blue-chips had earlier made a bright start to the trading week, lifted by news that the US and Iran have reached an interim agreement to reopen the Strait of Hormuz and begin 60 days of talks on Tehran's nuclear programme, a key obstacle in efforts to bring the conflict to an end.
Officials from both countries are expected to meet in Switzerland later this week to formally sign the accord, although some issues appear to remain unresolved, and neither side has yet published the text of the agreement.
"The framework deal is a major step forward to ending the conflict, although it is still not officially signed and remains light on detail. Markets seem cautiously optimistic there won't be any setbacks to getting it over the line, albeit investors are aware the narrative can change at the click of a finger.
"A full celebration is off the cards until the ink is dry on the deal," said Russ Mould, investment director at AJ Bell.
The news saw Brent crude for August delivery trade sharply lower at USD83.18 a barrel on Monday, down sharply from USD87.00 at the time of the equities close in London on Friday.
Unsurprisingly, weak oil majors underperformed with BP and Shell down 3.3% and 4.4% respectively, while defence manufacturer, BAE Systems fell 4.7%.
Utilities were a weak feature ahead of Thursday's Makerfield by-election, which could see the Mayor of Greater Manchester, Andy Burnham, secure a return to Westminster.
If successful, Burnham is expected to launch a leadership challenge to Prime Minister Keir Starmer. Over the weekend, the Guardian said a decade-long project to bring water and energy back into public control will lie at the heart of Burnham's agenda should he become PM.
Centrica, SSE and United Utilities all ended lower by 2.3%, 1.0% and 2.7% respectively.
The FTSE 100's falls saw London underperform European and US peers.
In European equity markets on Monday, the CAC 40 in Paris ended up 0.4%, and the DAX 40 in Frankfurt climbed 1.1%.
In New York, the Dow Jones Industrial Average was up 1.2%, the S&P 500 was 1.7% higher and the Nasdaq Composite jumped 2.7%.
The euro traded higher against the greenback, at USD1.1604 on Monday against USD1.1583 on Friday. Against the yen, the dollar was trading at JPY160.14, down slightly from JPY160.18 on Friday.
The pound traded at USD1.3436 on Monday afternoon, up from USD1.3422 on Friday. Against the euro, sterling ebbed to EUR1.1580 from EUR1.1587 on Friday.
The yield on the US 10-year Treasury eased to 4.47% on Monday from 4.48% on Friday. The yield on the US 30-year Treasury narrowed to 4.96% from 4.97% on Friday.
Gold traded at USD4,354.54 an ounce on Monday, higher from USD4,219.28 on Friday, supporting shares in Fresnillo, Endeavour Mining and Hochschild Mining, up 6.6%, 7.2% and 11% respectively.
In London, investors are looking ahead to inflation data on Wednesday and the Bank of England rate call a day later.
Barclays forecasts headline CPI inflation to accelerate to 3.0% year-on-year in May from 2.8% on-year in April, with core CPI increasing to 2.7% in May from 2.5% in April. A rebound in airfares will lead to services inflation re-accelerating, which Barclays expects to be somewhat offset by disinflation in food, alcohol and tobacco and core goods.
On Thursday, analysts expect the BoE to leave interest rates unchanged, with all eyes on guidance.
At its April meeting, the BoE's Monetary Policy Committee voted 8-1 to leave bank rate on hold at 3.75%, with Chief Economist Huw Pill the sole dissenter.
He pushed for a quarter-point rate increase to 4.0%, and analysts think this view could be backed this time around by Megan Greene. She recently argued that "the case for hiking rates grows as the conflict wears on" and that she believes a tightening in monetary policy over the coming weeks or months may be necessary.
On the FTSE 100, Bunzl advanced 0.6% as Bloomberg reported that activist investor Elliott Investment Management has built a near-5% stake in the distribution firm.
Elliott is pushing for London-based Bunzl to conduct a share buyback, as well as a strategic probe of its North America arm, Bloomberg reported, citing people familiar with the matter.
Rolls-Royce surged 3.9% after securing two important agreements involving its new small nuclear reactors.
Swedish nuclear development company Videberg Kraft has chosen Rolls-Royce to supply three Small Modular Reactors on the Varo peninsula, on Sweden's west coast.
This comes a day after the UK and Japan agreed to cooperate on advanced nuclear technologies, under which Rolls will work with the UK National Nuclear Laboratory and Japan Atomic Energy Agency to "accelerate the introduction of advanced nuclear technologies in the UK."
On the FTSE 250, Vistry fell 7.1% as JPMorgan downgraded to 'underweight' from 'neutral' with a new share price target of 210p, down from 430p.
In addition, the Sunday Times said the Kent, England-based housebuilder is looking to cut a swathe of jobs to preserve cash.
According to internal correspondence seen by the Sunday Times, Chief Executive Adam Daniels launched a "voluntary exit scheme" in a memo to the 4,500-strong workforce on Wednesday.
Last month, Vistry paused its share buyback programme to "prioritise debt reduction".
The biggest risers on the FTSE 100 were Endeavour Mining, up 276.00p at 4,106.00p, Fresnillo, up 198.00p at 3,200.00p, Antofagasta, up 246.00p at 4,290.00p, Weir Group, up 120.00p at 2,444.00p and Rolls-Royce, up 50.40p at 1,358.40p.
The biggest fallers on the FTSE 100 were BAE Systems, down 90.50p at 1,820.50p, Shell, down 140.00p at 3,080.50p, BT, down 7.00p at 202.50p, BP, down 17.50p at 517.00p, and Vodafone, down 3.25p at 112.50p.
Tuesday's global economic calendar has interest rate decisions in Australia and Japan overnight and retail sales and industrial production data from China.
Tuesday's local corporate calendar has a trading statement from SThree and full-year results from Accsys Technologies and Inspiration Healthcare.
By Jeremy Cutler, Alliance News reporter
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