UK equities moved lower on Monday as investors remained cautious amid heightened tensions between the US and Iran and continued uncertainty surrounding the blockade of the Strait of Hormuz.
The FTSE 100 was down 0.17% at 03:30 ET (07:30 GMT), while European markets also opened slightly weaker. Germany’s DAX declined 0.06% and France’s CAC 40 slipped 0.03%. Sterling was little changed against the US dollar at 1.3492.
Geopolitical developments remained at the centre of market attention. U.S. Central Command said the number of commercial vessels redirected as part of enforcement measures linked to the US blockade of Iran had increased to 55, compared with 53 on August 8. Two vessels have been disabled and another two boarded to enforce compliance.
CENTCOM also said more than 30 vessels had been permitted to pass through to deliver humanitarian assistance. Meanwhile, personnel aboard the USS Abraham Lincoln continued maintaining F/A-18E Super Hornets to ensure the carrier strike group remained prepared for operations.
The latest developments followed comments from U.S. President Trump on Sunday suggesting Washington was adopting a “low-key” stance towards Tehran.
“We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact they have no money,” Trump said, according to Axios.
A separate Wall Street Journal report published on Sunday suggested Trump could be prepared to move away from pursuing a formal nuclear agreement and instead declare success if Iran fully reopens the Strait of Hormuz. Negotiations nevertheless remain complicated by demands from Tehran, which include ending the naval blockade, withdrawing U.S. forces, easing sanctions and providing war reparations, according to Iran’s Supreme National Security Council.
Developments in Gaza also remained in focus after Trump shared an opinion piece by Hillary Clinton supporting his peace proposal. Clinton wrote that there is “no alternative framework” beyond the “20-point plan.”
Israel has rejected Trump’s separate 15-point Gaza proposal, with Prime Minister Benjamin Netanyahu saying Israeli forces “will not carry out any withdrawal until Hamas is genuinely disarmed.”
UK labour market shows signs of stabilisation
There were more encouraging signals from the UK employment market, with KPMG and the Recruitment & Employment Confederation reporting “rays of light” as permanent hiring stabilised for the first time since Liz Truss stepped down as prime minister in 2022.
The REC/KPMG permanent placements index increased to 50 in July from 49.1 in June. The temporary billings index slipped to 51.9 from 52.9, although it remained at one of its strongest levels of growth since early 2023.
“Despite ongoing uncertainty it’s encouraging that businesses are starting to press ahead with investment,” said Callum Licence, KPMG UK & Switzerland Group Head of Advisory. The improvement came after the permanent placements measure experienced its longest recorded contraction, lasting 45 months.
REC Chief Membership & Innovation Officer Maxine Bligh said “rays of light are beginning to break through for the job market as employers revive hiring plans,” with July becoming the first month in almost three years in which permanent placements did not decline.
Oil and gold prices move higher
Brent crude gained 0.13% to $83.66 per barrel, while WTI crude edged 0.14% lower to $78.08. Precious metals strengthened, with gold futures rising 0.32% to $4,413 and spot gold gaining 0.27% to $4,353.82.
UK company round-up
Serica Energy (LSE:SQZ) confirmed that its $197 million offer for Pharos Energy is final as Israel’s Ratio Petroleum continues to challenge the North Sea producer with a marginally higher competing proposal.
Plus500 (LSE:PLUS) reported a strong first-half performance, with Customer Income increasing 24% and revenue advancing 12% to multi-year highs. EBITDA also moved higher despite increased spending on customer acquisition.
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