London’s FTSE 100 fell at the start of the week, but averted a much deeper decline following US strikes on Iran.
SPI Asset Management analyst Stephen Innes commented: ‘The market sits like a coiled spring, waiting for Tehran’s next move. Everything hinges on Iran’s response—and whether it’s a symbolic jab or a haymaker that knocks the Strait of Hormuz offline.’
The FTSE 100 index opened down 14.11 points, 0.2%, at 8,760.54. The FTSE 250 edged down just 4.46 points at 21,144.04, and the AIM All-Share was down 0.65 points, 0.1%, at 758.49.
The Cboe UK 100 was down 0.2% at 872.51, the Cboe UK 250 0.1% lower at 18,684.65, and the Cboe Small Companies was down 0.1% at 17,234.61.
In Frankfurt, the DAX 40 was down 0.2%. The CAC 40 in Paris was 0.3% lower.
A barrel of Brent rose to $77.50 early Monday, from $76.49 at the time of the London equities close on Friday. Gold faded to $3,355.02 an ounce from $3,366.36, but had traded as high as $3,373.54 earlier on Monday. Brent also faded from intraday highs, having earlier bought $79.31.
Sterling fell to $1.3436 early Monday, from $1.3467 at the time of the London equities close on Friday. The euro declined to $1.1492 from $1.1521. Against the yen, the dollar surged to JP¥147.23 from JP¥145.89.
ING analysts commented: ‘The dollar is trading higher this morning after the US strikes on Iran. But the moves still look quite small in FX, which suggests lingering reluctance to unwind strategic USD shorts, as well as market hopes for a potential de-escalation.’
The yield of the US 10-year Treasury was unbudged at 4.40%, where it stood at the time of the London equities close on Friday. The yield on the 30-year widened slightly to 4.92% from 4.91%.
President Donald Trump said US air strikes had ‘completely and totally obliterated’ Iran’s main nuclear enrichment facilities, and warned of more attacks to come if Tehran does not seek peace.
In a televised address to the nation from the White House after the US joined Israel’s air campaign against Tehran, Trump called the US attacks a ‘spectacular military success.’
Iran will defend itself by all means necessary, its foreign minister said.
US Secretary of State Marco Rubio urged China to help deter Iran from shutting down the Strait of Hormuz, the crucial trade route through which one-fifth of global oil output passes.
Beijing on Monday said the international community must do more to prevent fighting between Iran and Israel from impacting the global economy, noting the ‘Persian Gulf and surrounding waters are important international trade routes’.
‘Maintaining security and stability in this region is in the common interests of the international community,’ foreign ministry spokesman Guo Jiakun said.
Berenberg analyst Holger Schmieding commented: ‘The direct US attack on Iranian nuclear facilities may exacerbate the near-term geopolitical risks of a wider conflict in the Middle East. Oil prices may stay elevated amid the grave uncertainty about how the conflict will evolve and whether oil and gas exports from the Gulf region could still be impacted to a significant extent. But a protracted disruption of such energy flows seems unlikely. We continue to base our economic and financial forecasts on the assumption that energy prices will fall back close to their pre-conflict levels by autumn, and possibly before that.’
In Tokyo, the Nikkei 225 ended down 0.1%, with a weaker yen limiting its losses. In Sydney, the S&P/ASX 200 closed down 0.4%. In China, the Shanghai Composite rose 0.6%, while the Hang Seng Index also traded up 0.6%.
In London, the geopolitical tensions hit airline shares. easyJet fell 1.8%, while Wizz Air gave back 1.6%.
Oil majors BP and Shell rose 1.5% and 0.6%.
Medical products and technologies company ConvaTec advanced 1.3%. JPMorgan placed ConvaTec on ’positive catalyst watch’.
Spectris surged 15%. It agreed to a buyout from private equity firm Advent International, although a rival bid from Kohlberg Kravis Roberts & Co.
Advent will pay £37.63 in cash for the provider of high-tech instruments, test equipment and software, an offer consideration that includes a 28 pence dividend. The bid values the entire issued and to be issued share capital of Spectris at around £3.8 billion. It implies an enterprise value of £4.4 billion.
However, a rival bidder could yet emerge after KKR, the New York-based private equity firm, said it continues to engage ‘constructively’ with Spectris although it added there ‘can be no certainty’ that any firm offer will be made.
Elsewhere in London, Aferian rose 16%. The video streaming solutions company expects to report a rise in revenue and a swing to profit for the half-year ended May 31.
Revenue growth of 36% to $16.6 million from $12.2 million is expected, while adjusted earnings before interest, tax, depreciation and amortisation in the range of $1.6 million to $1.8 million is forecast. This would be a swing from the prior year’s adjusted Ebitda loss of $2.3 million.
‘The improved financial performance in the first half of FY2025 follows on from the strong turnaround performance in H2 last year. We expect this level of profitability to continue into H2 FY2025 with full year revenues to be approximately 20% higher than FY2024 driven by strong growth in the Amino business. We are continuing our debt refinancing discussions and will provide an update in due course,’ Chief Executive Officer Mark Carlisle said.
Monday’s global economic calendar has flash composite PMI readings from the eurozone at 0900 BST, the UK at 0930 and the US at 1445.
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