FTSE 100 flat as oil price rises amid Middle East tensions
Markets Navigate Middle East Uncertainty as Oil Prices Climb
FTSE 100 flat as oil price - London's benchmark index showed limited movement on Monday while energy stocks benefited from escalating geopolitical tensions. The FTSE 100 finished the trading session with a marginal gain of just one point, settling at 10,498.29. Meanwhile, the mid-cap FTSE 250 posted a slightly stronger performance, climbing 25.17 points to reach 23,396.58, representing a 0.1% increase. The smaller-cap AIM All-Share index experienced a modest decline, dropping 2.68 points or 0.4% to close at 761.14.
Energy Sector Benefits from Rising Oil Prices
Crude oil prices moved higher as hostilities in the Middle East intensified following last week's military exchange between Washington and Tehran. American forces conducted strikes against Iranian targets for a second consecutive day on Monday, which prompted Tehran to respond by targeting American allies positioned across the Gulf region. Both nations are currently engaged in a standoff concerning control over the strategically vital Strait of Hormuz.
President Donald Trump announced plans to impose charges on commercial vessels navigating through this critical shipping lane. He stated that all cargo passing through the waterway would be required to contribute toward maintaining its openness. Additionally, the American president confirmed the restoration of restrictions on Iranian maritime traffic.
"The Hormuz Strait is OPEN," he declared on his Truth Social platform. "We are reinstating THE IRANIAN BLOCKADE."
Trump further explained that the United States would recover expenses through a 20% charge applied to all shipments traversing the essential maritime corridor. Brent crude contracts for September delivery traded at $79.42 per barrel on Monday, marking an increase from Friday's closing price of $75.86.
Susannah Streeter, who serves as chief investment strategist at Wealth Club, provided commentary on the market implications. She noted that while oil prices have not yet reached emergency levels, the gradual upward trajectory could spark renewed concerns about inflation and potentially higher interest rates.
Within London markets, the surge in energy prices boosted major oil companies. BP shares advanced by 4.6%, while Shell gained 2.3%. Shell also revealed plans to divest its Solenergi Power division, which encompasses the Sprng Energy group, to Aditya Birla Renewables in a transaction valued at $1.8 billion.
European and American Markets Show Mixed Results
Across European exchanges, indices posted modest gains. Paris's CAC 40 finished 0.3% higher, while Frankfurt's DAX 40 rose by 0.2%.
Meanwhile, Wall Street experienced a downturn. The Dow Jones Industrial Average slipped 0.2%, the S&P 500 declined 0.4%, and the Nasdaq Composite fell 0.8%. Technology equities continued their turbulent trading pattern, with sharp declines mirroring heavy selling pressure observed in Asian markets. South Korea's Kospi index suffered a substantial 9.0% loss.
SK Hynix, which made its debut on New York exchanges on Friday, experienced a 15% drop in South Korea alongside an 11% decline for Samsung Electronics. On Monday in New York, SK Hynix American Depositary Receipts decreased by 6.7%, while domestic technology companies ARM, Marvell Technology, and Micron Technology fell 5.1%, 4.8%, and 4.0% respectively.
Currency and Bond Markets
The euro weakened against the US dollar, trading at $1.1400 on Monday compared to Friday's $1.1434. The dollar strengthened against the yen, moving to 162.32 yen from 161.49 yen on Friday. The British pound traded at $1.3378 on Monday afternoon, down from Friday's $1.3419. Against the euro, sterling eased slightly to 1.1733 euros from 1.1737 euros on Friday.
Government bond yields increased across the board. The US 10-year Treasury yield rose to 4.60% from 4.56% on Friday, while the 30-year Treasury yield climbed to 5.09% from 5.06%.
Gold prices declined, trading at $4,015.30 per ounce on Monday, down from Friday's $4,101.39.
UK Housing and Corporate News
Back in London, construction companies advanced despite rising bond yields. The Times reported that Andy Burnham, the anticipated incoming prime minister, is contemplating the revival of the Help to Buy program when he assumes office next week. Originally introduced by Chancellor George Osborne in 2013, this initiative aimed to stimulate the housing sector during its recovery from the 2008 global financial crisis.
On the FTSE 100, housebuilding firms Persimmon and Barratt Redrow gained 2.9% and 1.5% respectively, while Taylor Wimpey on the FTSE 250 climbed 2.1%. Conversely, the lower gold price negatively impacted mining companies Fresnillo and Endeavour Mining, which fell 2.9% and 2.2% respectively. Technology-focused investment trusts Polar Capital Technology Trust and Scottish Mortgage Investment Trust were held back by sector weakness, declining 1.8% and 2.6% respectively.
Recruitment companies PageGroup and Hays emerged as top performers on the FTSE 250, surging 20% and 14% respectively. PageGroup celebrated a strong second-quarter showing, driven by expansion in the Asia Pacific and Americas markets. The Weybridge-based firm reported that gross profit increased by 1.3% during the second quarter of 2026, reaching £197.6 million compared to £195.2 million previously.