London Stock Exchange building ©Kaihsu Tai
The FTSE 100 traded 0.13% lower on Monday as developments in the U.S.-Iran conflict and shipping through the Persian Gulf remained in focus.
As of 03:25 ET (07:25 GMT), Germany’s DAX was also down 0.13%, while France’s CAC 40 declined 0.07%. Sterling gained against the U.S. dollar, with GBP/USD up 0.077% at 1.3525.
U.S. Central Command released footage showing the Iranian tanker M/T Kylo, also referred to as the “Noxen,” sinking in the Gulf of Oman following U.S. strikes. The operation also disabled the M/T Downy near Kharg Island and the M/T Stark 1 near Jask, according to the report.
CENTCOM said the strikes followed Iranian Revolutionary Guard Corps missile launches targeting two U.S. Navy vessels. It said the missiles were evaded and there were no U.S. casualties.
Iran plans to announce a new restricted zone in the Gulf and approve maps for a shipping corridor through the Strait of Hormuz. Tehran has said it will commit to keeping the waterway open if the United States ends attacks and threats against Iran.
The developments follow the breakdown of a June ceasefire in the six-month U.S.-Israeli conflict with Iran, with renewed strikes affecting shipping in the region.
U.S. War Secretary Pete Hegseth said, “It’s simple: if Iran shoots at U.S. ships, we will destroy (and sink) their oil tankers.” CENTCOM commander Adm. Brad Cooper said Iran would face “an even higher economic cost” for further attacks. Iran’s Foreign Ministry described the U.S. strikes as a “war crime” and a breach of the UN Charter.
ING commodities strategists said in a Monday note that “the oil market remains well-supported with little sign of a peace between the US and Iran,” adding that Iran’s proposed restricted zone outside Hormuz “could put additional vessels in the Gulf of Oman at risk.”
Oil shipments have continued despite the conflict. The U.S. energy secretary cited throughput of “a little more than 9m b/d” through Hormuz under U.S. Navy escort. Speculators increased their net-long position in ICE Brent by 37,837 lots to 261,435 as of last Tuesday.
Jefferies’ Mohit Kumar said interest rates were higher and risk assets weaker on Friday after U.S. payroll figures exceeded expectations, with the probability of a September Federal Reserve rate increase moving to around 60%.
Kumar said Jefferies has “stayed away from long end rates since July, as we did not see an easy way out of the US Iran war,” and identified this week’s U.S. consumer price inflation data and Wednesday’s European Central Bank decision as upcoming events for markets, alongside developments in the Gulf.
Britain’s Energy Secretary Ed Miliband discussed de-escalation with Saudi Foreign Minister Prince Faisal bin Farhan by telephone, according to the Saudi foreign ministry, which cited efforts to “enhance the security and safety of international waterways.”
UK housing data also drew attention. Lloyds figures showed British house prices declined 0.4% year-on-year in August, the first annual decrease since November 2023, compared with economists’ expectations for a 0.2% increase. Prices fell 0.2% month-on-month against forecasts for a 0.1% rise.
Brent crude increased 0.95% to $97.19 a barrel, while WTI rose 0.66% to $92.09. December gold futures declined 0.74% to $4,443.59, and spot gold was down 0.73% at $4,398.04.
UK company news
TotalEnergies (LSE:TTE) moved its Papua LNG project closer to a final investment decision after reducing planned capital expenditure to about $14 billion through contract rebidding and design optimisation. The company also finalised an amended gas agreement with Papua New Guinea and established an LNG marketing joint venture with Kumul Petroleum.
IQE (LSE:IQE) reported a first-half adjusted core profit of £6 million, compared with a loss in the prior period, supported by demand from AI infrastructure, data centre and defence customers. The company said momentum continued into the second half and reiterated its full-year forecast.
Waterland plans to make an offer for Gamma Communications (LSE:GAMA) above Epiris’ £1.08 billion bid, according to the Sunday Times. Gamma agreed last week to a 1,120 pence-per-share offer from Epiris. Waterland plans to sell two divisions to Giacom if its proposed acquisition succeeds.
Standard Life (LSE:SDLF) reported first-half profit above expectations, with the results supported by new business growth and demand for pension risk transfer transactions.