9th Mar 2026 17:04
(Alliance News) - Stock prices in London closed lower on Monday, but the FTSE 100 steadily pared earlier losses throughout the day as investors mulled the impact of the ongoing war in the Middle East on inflation and interest rates.
The FTSE 100 index closed down 35.23 points, 0.3%, at 10,249.52. The FTSE 250 ended down 357.65 points, 1.6%, at 22,143.30, and the AIM all-share closed down 17.46 points, 2.2%, at 767.24.
The Cboe UK 100 was down 0.2% at 1,020.72, the Cboe UK 250 was 1.9% lower at 380.85, and the Cboe small companies was down 1.0% at 17,832.22.
In European equities on Monday, the CAC 40 in Paris closed down 1.0% and the DAX 40 ended 0.8% lower.
The pound climbed to USD1.3396 on Monday afternoon from USD1.3387 at the equities close on Friday. The euro stood slightly lower at USD1.1593 from USD1.1597. Against the yen, the dollar was trading higher at JPY158.13 compared to JPY157.62.
Developments in the Middle East were in focus on Monday, as Iran carried out retaliatory strikes against oil-producing Gulf nations.
Turkey confirmed a second ballistic missile was shot down by NATO defences in Turkish airspace, as Washington urged all of its citizens to leave southeast Turkey over security concerns.
So far, Turkey appears to have been spared in the conflict, AFP reported, despite the fact that US troops are stationed at several of its bases.
"A ballistic munition launched from Iran and entering Turkish airspace was neutralised by NATO air and missile defence assets in the eastern Mediterranean," Turkey's defence ministry said.
Brent oil was higher at USD100.02 a barrel on Monday afternoon from USD90.85 late Friday.
Earlier in the day, Brent traded as high as USD119.25 a barrel.
The panic had eased by Monday's close, but analysts noted that the underlying reasons for the overnight move remain in place.
Fears of inflation triggered a sharp sell-off in gilt markets, while Ebury analyst Matthew Ryan noted that swap markets have moved from fully pricing in two Bank of England cuts in 2026 to now seeing a "non-negligible possibility of a hike".
"At the very least, we think that additional [Monetary Policy Committee] interest rate cuts are completely off the table for now. Unlike in the euro area, inflation in Britain is already comfortably above target, and the liberalisation of UK markets, the push away from domestic oil production and a limited storage capacity ensure a rapid pass-through from higher oil prices to household energy bills," Ryan said.
"Combine these risks with Prime Minister Starmer's hesitant and indecisive handling of the Iran conflict, and it may be tough for the pound to sustain its gains versus the euro."
Stocks in New York were lower. The Dow Jones Industrial Average was down 0.8%, the S&P 500 index was 0.4% lower, and the Nasdaq Composite was down marginally.
The yield on the US 10-year Treasury slimmed to 4.13% on Monday from 4.16% on Friday. The yield on the US 30-year Treasury narrowed to 4.74% from 4.78%.
Back in London, shares in Pearson climbed 0.6% as it said it has engaged a subsidiary of Morgan Stanley to facilitate the second and final tranche of its GBP350 million share buyback programme.
The London-based education materials publisher launched the buyback in late January, with Citigroup Global Markets Ltd conducting the first half. Pearson at the time said it expected this first tranche to be completed by May 21.
On Monday, Pearson said that it has entered into updated arrangements with Citi, under which it now expects the first tranche to conclude on or before April 2.
Pearson expects the second tranche, under which it intends to bring the buyback's total value to GBP350 million, to finish on or before May 29.
Additionally, Pearson said it has entered 2026 with momentum and confidence in delivering its outlook for this year and beyond, standing by its outlook as detailed in its 2025 report.
On the FTSE 250 index, Clarkson climbed 3.4%.
The shipping services provider said market sentiment has been "positive and trading has been good" so far in 2026 after a tough 2025 which saw sales and profits drop.
The London-based firm said pretax profit fell 23% to GBP86.7 million in 2025 from GBP112.1 million the year prior, as revenue dropped 4.5% to GBP631.4 million from GBP661.4 million.
Case said in 2026 to date, momentum from the fourth quarter of 2025 has continued, and market sentiment has been "positive and trading has been good."
At the end of 2025, the forward order book for invoicing in 2026 was USD244 million versus USD231 million at the beginning of 2025.
Case said the forward order book reflects new building contracts, long-term time charters and multi-year contract income, "providing a good platform for future earnings visibility".
Vietnam Enterprise Investments fell the most on the FTSE 250 index and was down 6.1%.
The investor in listed equities in Vietnam fell as the firm said it will remove import tariffs on fuel amid growing energy-security fears.
The government said domestic supply is "basically secured" but warned that if the conflict continues into April the "market may face more difficulties".
On the AIM market, t42 IoT Tracking Solutions jumped 41% as it said it foresees "minimal impact" from ongoing turmoil in the Middle East, as it expects to post improved revenue and profit for 2025.
t42 said revenue for 2025 grew "significantly" to over USD6.1 million from USD4.2 million in 2024, with an around 10% increase in software-as-a-service revenue.
The company noted "strong trading" across all sections of the business.
"The company is seeing the benefits of establishing long-term relationships with customers globally. Given the global nature of the customer base and location of manufacturing facilities, the company foresees minimal impact from the current turmoil in the Middle East and remains confident that its pipeline and ability to service customers remain unaffected," said t42.
Gold fell to USD5,104.20 an ounce on Monday from USD5,142.35 at Friday's close.
The biggest risers on the FTSE 100 were Metlen Energy & Metals, up 1.40p at 35.60p, Shell, up 74.00p at 3,207.00p, BP, up 11.10p at 510.00p, BAE Systems, up 45.00p at 2,259.00p, and Babcock International, up 23.00p at 1,391.00p.
The biggest fallers on the FTSE 100 were Persimmon, down 71.00p at 1,223.50p, Intertek, down 190.00p at 3,844.00p, Segro, down 33.00p at 724.80p, British Land, down 15.00p at 365.40p, and JD Sports Fashion, down 2.90p at 73.54p.
Tuesday's economic calendar will see Japanese GDP data overnight, before trade balance data for Germany and France and existing home sales figures for the US.
On Tuesday's UK corporate calendar are full year results for housebuilder Persimmon and thermal energy and fluid technology firm Spirax, among others.
By Michael Hennessey, Alliance News reporter
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PearsonClarksonVietnam Enterprise InvestmentsT42 Iot Track.Metlen EnergyShellBAE SystemsBabcockBPBritish LandPersimmonIntertek GroupJD SportsSegro