Lunchtime market roundup: Stocks lack direction; MidEast tensions high

Stock prices in London were mostly a notch higher around midday on Monday, as tensions between the US and Iran continued to be high, while corporate news were relatively quiet.

US Treasury Secretary Scott Bessent, in a column for the Financial Times, declared that an “economic D-Day” had begun against Tehran on Monday and said any country that continued to enable the Islamic republic would become a “global pariah”.

He also claimed on X that the US had “dismantled Iran’s military capabilities, destroyed nearly 100% of its military factories, and buried its nuclear programme”. However, Iranian Deputy Foreign Minister Kazem Gharibabadi posted on the same site that the US “narrative doesn’t add up”.

Bessent was due to set out details of the US plan on Monday, with none released so far, but it is unclear how much more economic pressure Washington can place on Tehran.

The FTSE 100 index was up 23.12 points, 0.2%, at 10,839.68. The FTSE 250 was up 5.13 points at 24,723.95, and the AIM all-share was up 0.55 points, 0.1%, at 812.51.

The Cboe UK 100 was up 0.3% at 1,077.61, the Cboe UK 250 was up 0.3% at 21,549.30, and the Cboe small companies was down 0.1% at 19,043.01.

“The FTSE 100 made a tentative start to the week, not helped by a slight pullback in oil prices which clipped the wings of index heavyweights BP and Shell,” AJ Bell’s Russ Mould commented.

BP was the third-lowest FTSE 100 listing, down 1.1%, while Shell lost 0.2%. Brent crude was quoted at USD92.97 a barrel at midday in London on Monday, down from USD94.08 late Friday.

Shares in pub operators were little-changed on Monday, despite the UK government’s announcement of a review on how business rates are calculated for pubs and hotels.

Jerry Schurder, former business rates policy lead at advisory firm Newmark UK, will lead the independent review of valuations and report back to the Treasury by the end of March 2027, PA said, with an eye to making recommendations for reform. The government is also launching a call for evidence from landlords, brewers, hoteliers and business owners.

JD Wetherspoon was up 0.2% on the FTSE 100, while smaller peer Fuller Smith & Turner was flat.

On AIM, MS International jumped 5.7% after announcing that its MSI Defence Systems subsidiary has won a EUR19.4 million contract to supply three MSI-DS naval gun systems to “a NATO nation”.

EDX Medical surged 28%.

The digital diagnostic products and services developer has raised approximately £2.7 million through a subscription for 19.4 million shares at 14p each, and intends to use the net proceeds to support the expansion of its new employee health screening service.

It also announced that two large firms have approached it about providing the screening service, in addition to the “three significant UK employers” with whom it is already in talks.

Union Jack Oil shares rose 4.6%.

The onshore fuel producer announced the immediate removal of all three members of the board and the appointment of Craig Howie and John Americanos.

“Following the board changes announced today, Union Jack’s immediate priority must be an urgent right-sizing of its central cost base, particularly with regard to directors’ remuneration,” said incoming executive chair Howie.

Smaller cap Coinsilium fell 8.3% despite Predictive Labs, a Coinsilium-backed venture and strategic advisory client, achieving further agreed development milestones for its prediction-markets analytics platform, Nijinn. The platform now operates end-to-end “as an integrated Alpha on deployed infrastructure.”

Coinsilium is subsequently exercising its right to subscribe to a further USD100,000 in preference shares under their existing investment agreement.

In other UK news, Thames Water’s creditors have revealed plans to appoint four new directors to the board of the stricken supplier if their rescue bid is given the green light to avoid it being nationalised.

Former Yorkshire Water chief executive Liz Barber is among the first tranche of proposed non-executive directors unveiled by the London & Valley Water consortium as it seeks UK government backing for the deal. Bernadette Kelly, the former permanent secretary at the Department for Transport, would also join the board, alongside Clive Selley, ex-chief executive of BT Openreach. Infrastructure expert Mike McTighe has already been named as the proposed new chair of Thames Water should the bid be accepted.

“The hope being that these are the sort of credible names which can inspire confidence in the company’s future in private hands,” Mould explained, adding that renationalisation “would impose large losses on creditors”.

In European equities on Monday, the CAC 40 in Paris was marginally higher, while the DAX 40 in Frankfurt was up 0.1%.

The pound was quoted at USD1.3628 midday Monday, slightly higher compared to USD1.3625 at the close on Friday. Against the euro, sterling rose to EUR1.1679 from EUR1.1672 a day prior. The euro stood lower at USD1.1663, against USD1.1673. Against the yen, the dollar was trading higher at JPY159.16 compared to JPY159.03.

Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.1%, the S&P 500 index down 0.2%, and the Nasdaq Composite down 0.61%.

The yield on the US 10-year Treasury was quoted at 4.71%, narrowing from 4.74%. The yield on the US 30-year Treasury was quoted at 5.25%, narrowing from 5.27%.

Gold was quoted higher at USD4,647.93 an ounce against USD4,605.34.

“With US futures pointing to a lower open on Wall Street, the stakes are steadily being raised ahead of Nvidia’s quarterly earnings later this week. Gold prices continued to gather momentum as government bond yields remain elevated, with the impact from the US Treasury’s surprise intervention last week proving to be as fleeting as a mayfly’s lifespan,” Mould commented. “The introduction of tit-for-tat tariffs between America and [Canada] only add to what is already a volatile picture.

“Attention will zero in on Federal Reserve chair Kevin Warsh at the Jackson Hole Symposium later this week as the ongoing crisis in the Middle East continues to stoke concerns about inflation.”

Other US economic updates due this week include ADP employment data on Tuesday, personal consumption expenditures – the Fed’s preferred inflation gauge – on Wednesday alongside GDP, and weekly jobless figures on Thursday.

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