London’s blue-chip index finished the final day of July down 29 points at 10,868, retreating from record highs set earlier in the session.
The pullback came as oil prices rose sharply and US markets opened in negative territory, with heavyweights including Unilever, RELX, Compass, HSBC and AstraZeneca all falling on the day.
Chris Beauchamp at IG described the move as classic end-of-month behaviour, saying: “End of month profit taking might be a bit of a cliché, but with a weekend of potential strikes on Iran and the last day of July trading upon us investors have looked to book in some gains.”
Beauchamp added that a close above 11,000 still feels inevitable, noting: “While a close above 11,000 eludes the index at present, it still seems a matter of when, not if.”
The government confirmed the first Budget under Prime Minister Andy Burnham and Chancellor John Healey will take place on 28 October, with HM Treasury pledging to stick to fiscal rules while using the event to drive growth and ease cost-of-living pressures.
Healey has commissioned the Office for Budget Responsibility to prepare an economic and fiscal forecast to be presented alongside the Budget statement.
Sainsbury (LSE: SBRY) was among the session’s strongest performers, jumping 6.2% after announcing the sale of Argos to Swift Partners for at least £120 million, with completion expected in early 2027.
Melrose Industries (LSE: MRO) was a notable faller, declining after a chemical tank incident at its GKN Aerospace Garden Grove facility in the US dented profits and triggered a pause to its share buyback programme.
Despite the incident, Melrose chief executive Peter Dilnot said momentum remains strong, with revenue up 10% and adjusted operating profit rising 16% in the first half, supported by strong demand across its aerospace business.
IG Group (LSE: IGG) was the session’s biggest faller, plunging 13.1% after announcing the proposed acquisition of US sports-betting business Underdog for up to $1.3 billion, a deal that will require a share issue and the pausing of its buyback programme.
NatWest (LSE: NWG) bucked the broader trend with a 3.7% gain after lifting its full-year guidance, with chief executive Paul Thwaite saying the bank’s strategy continues to deliver following the completed Evelyn Partners acquisition.
Morrisons reported that annual pre-tax losses widened to £926 million from £612 million, with nearly 5,000 jobs cut, though the supermarket said underlying business performance was robust and net debt had fallen 46% to £3.2 billion since CD&R’s £7 billion takeover in 2021.
Brent crude climbed back above $90 a barrel, with the RAC flagging that UK petrol prices reached their highest level of the year at an average of 160p a litre, with RAC head of policy Simon Williams warning that diesel looks set to reach 185p a litre in the coming weeks.
Across the Atlantic, the Dow Jones closed up 0.4% while the S&P 500 and Nasdaq each added 0.3%, with Apple providing the biggest drag after tumbling 8.6% following guidance warnings around supply constraints for AI-enabled devices.
Richard Hunter, head of markets at Interactive Investor, said the FTSE 100 has reemerged as a haven destination, noting that its defensive qualities, average dividend yield of 3% and exposure to oil, mining and banking stocks are attracting significant global inflows.