London’s blue-chip index closed firmly in positive territory on Monday as a temporary halt in US-Iran hostilities sent oil prices tumbling sharply lower.
The FTSE 100 ended the session up 45.52 points, or 0.4%, closing at 10,781.75, while the FTSE 250 gained 96.61 points, also 0.4%, to finish at 23,898.10.
The US held fire at the weekend after 13 days of attacks on sites in Iran, with Donald Trump’s UN envoy stating the president was “giving talks some space.”
Tehran responded by announcing it would halt its retaliatory strikes on regional neighbours, providing a meaningful respite for Gulf shipping lanes and the broader oil industry.
David Morrison at Trade Nation noted it is “unclear” whether the pause represents a precursor to renewed peace talks or is simply a tactical military manoeuvre.
Brent crude for September delivery dropped to 89.71 dollars a barrel on Monday afternoon, down sharply from 95.49 dollars at the close of trading on Friday.
Kathleen Brooks, research director at XTB, cautioned that “although the situation in the Middle East has calmed, it has not been resolved, and it could make a decline below 85 dollars per barrel tricky at this stage.”
Energy stocks bore the brunt of the oil price selloff, with BP (BP.L) dropping 2.6% and Shell (SHEL.L) falling 0.9%, while FTSE 250-listed Harbour Energy and Ithaca Energy declined 5.7% and 7.8% respectively.
Vodafone (VOD.L) led the FTSE 100 gainers, surging 4.8% after the telecoms giant raised its full-year earnings guidance, now expecting annual adjusted Ebitda after leases of between 13 billion euros and 13.3 billion euros, up from a prior range of 11.9 billion to 12.2 billion euros.
On an organic basis, Vodafone’s service revenue climbed 5.2%, with growth recorded across all segments, with Deutsche Bank noting the results beat consensus expectations in all markets except Turkey.
AstraZeneca (AZN.L) added 1.7% after reporting second-quarter revenue in line with consensus, while earnings came in above forecast, helped by a lower-than-projected tax charge and improved margins at the Cambridge-based drugs maker.
The results kick off a packed week of corporate reporting, with UK lenders Lloyds, Barclays and NatWest among the notable names due to report, alongside US technology giants Meta Platforms, Microsoft, Apple and Amazon on Wall Street.
M&A activity also remained brisk in London, with DCC Energy rising 0.9% after agreeing to a £5.75 billion takeover by a consortium comprising funds advised by Kohlberg, Kravis, Roberts and Energy Capital Partners Management.
Pinewood surged 33% after the automotive software provider said it would be “minded to recommend” a possible offer from Ridgeview Partners, priced at £4.48 per share in cash and valuing the company at £545 million.
Pharos Energy agreed to an all-cash takeover from Serica Energy valuing Pharos at £145.7 million, sending Pharos shares up 27% while Serica fell 7.3%.
Vesuvius (VSVS.L) plunged 13% on the FTSE 250 after the molten metal flow engineering company warned that 2026 trading profit would fall below current market expectations, citing ongoing operational issues in its steel division and a challenging environment in Advanced Refractories, particularly across Europe.
The company now expects full-year trading profit to be slightly ahead of the £151.1 million recorded in 2025, well below the £169 million consensus cited by JPMorgan.
Central bank decisions will dominate the broader macro agenda this week, with rate calls expected from the Bank of England, the US Federal Reserve and the Bank of Japan, with all three widely anticipated to hold rates steady.
RBC Capital Markets and Goldman Sachs both forecast a 7-2 vote from the Monetary Policy Committee to hold the bank rate at 3.75%, with Goldman analysts saying “the guidance will likely reiterate that the MPC stands ready to act as necessary to return inflation to target, while refraining from giving a strong steer on the upcoming meetings.”
The pound slipped to 1.3305 dollars on Monday afternoon from 1.3342 dollars at Friday’s close, while gold remained broadly flat at 4,077.10 dollars an ounce.