UK equities moved lower on Monday as escalating tensions between the United States and Iran weighed on investor sentiment, driving energy prices sharply higher and prompting a broad risk-off move across European markets.
The FTSE 100 fell 0.61% in early trading, while Germany’s DAX lost 0.16% and France’s CAC 40 slipped 0.05%. Sterling edged 0.08% higher against the US dollar to trade at 1.3466.
Geopolitical concerns intensified after Kuwait’s military said its air defence systems were intercepting Iranian drones, describing the attacks on social media as “sinful Iranian aggression.” The announcement followed confirmation from U.S. Central Command that it had completed a ninth consecutive night of military strikes targeting Iranian command centres, missile launch sites, coastal surveillance systems, maritime capabilities and communications infrastructure. CENTCOM said the operations were intended to “further diminish Iran’s ability to attack commercial vessels and civilian mariners transiting the Strait of Hormuz.”
Separately, UK Maritime Trade Operations issued a warning after a vessel caught fire near Kumzar, off the coast of Oman, although the cause of the incident has yet to be determined.
Speaking to reporters while returning from the FIFA World Cup final, U.S. President Donald Trump said the military action honoured fallen American service members, adding that Iran “has been very badly damaged” and had “almost lost everything militarily,” before stating, “We control the Strait, they don’t control anything.”
U.S. Secretary of State Marco Rubio told CNN that Washington was receiving “signals through multiple channels of Iran’s desire to negotiate, but there is a growing split within the regime,” while stressing that any agreement would need to be “real” and enforceable.
In the UK, Andy Burnham is expected to become prime minister on Monday after pledging to ease pressure on household finances. His position on North Sea oil policy has attracted attention after President Trump welcomed proposals to expand drilling in a Truth Social post. However, Labour deputy leader Lucy Powell told the BBC that Burnham would maintain the party’s commitment to ending new exploration licences, while supporting further development of existing fields such as Jackdaw and Rosebank.
Oil prices extended recent gains as concerns over potential disruption to shipping through the Strait of Hormuz intensified. Brent crude rose 2.35% to $90.18 a barrel, while West Texas Intermediate gained 2% to $83.40. Brent reached its highest level in more than a month following its strongest weekly advance since April.
Gold prices eased despite heightened geopolitical tensions, with gold futures slipping 0.24% to $4,009.12 an ounce and spot gold falling 0.32% to $4,004.77.
UK market highlights
Ryanair (LSE:0A2U) reported a 34% decline in first-quarter profit after weaker ticket prices and higher fuel costs offset continued growth in passenger demand.
Big Yellow Group (LSE:BYG) posted a 3% increase in first-quarter revenue, supported by higher occupancy levels and contributions from newly opened storage facilities.
Segro (LSE:SGRO) rejected an improved £13.5 billion takeover proposal from Prologis, with the board maintaining that the revised offer undervalues the business.
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