London stocks ended Monday’s session in negative territory, dragged lower by climbing oil prices and a shortage of fresh market catalysts to drive buyer confidence.
The FTSE 100 closed down 29.81 points, or 0.3%, at 10,720.30, while the FTSE 250 fell 163.02 points, or 0.7%, to finish at 24,704.40.
European markets also retreated, with the CAC 40 in Paris shedding 0.7% and the DAX 40 in Frankfurt declining 0.4% by the close of trading.
Across the Atlantic, Wall Street delivered a mixed session, with the Dow Jones Industrial Average down 0.3%, the S&P 500 off 0.1%, and the Nasdaq Composite edging up 0.2%.
Investors are turning their attention to results from US retailers Walmart and Home Depot this week as the second quarter earnings season moves toward its conclusion.
Jemma Slingo, pensions and investment expert at Fidelity International, said markets were watching for further economic fallout from the ongoing Middle East conflict.
She said: “Are households still splashing out, or becoming more selective about what they buy as prices rise? Data from last week wasn’t particularly upbeat: oil prices edged higher, while US retail sales in July fell unexpectedly.”
Brent crude for October delivery climbed to 89.07 dollars a barrel on Monday, up from 87.94 dollars late on Friday, with David Morrison, senior market analyst at Trade Nation, citing uncertainty over US-Iran relations and the continued closure of the Strait of Hormuz.
In London, Tuesday’s jobs and average earnings figures will be closely watched, followed by inflation data the following day, as traders assess the health of the UK economy.
The Office for National Statistics reported the jobless rate fell to 4.9% in the three months to June from 5.0% in the three months to May, having peaked at 5.2% at the end of 2025.
The monthly gauge of permanent job placements from the Recruitment and Employment Confederation and KPMG increased to 50 in July from 49.1, ending a 45-month downturn in the sector.
Analysts at RBC Capital Markets are forecasting a further drop in the unemployment rate to 4.7% in the three months to the end of June.
Gold miners provided a bright spot in London trading, with Endeavour Mining rising 2.0%, Fresnillo climbing 1.7%, and Hochschild Mining gaining 3.2% as gold traded at 4,423.12 dollars an ounce.
Housebuilders suffered after Rightmove data showed UK asking prices fell 2.0% month-on-month in August to an average of £364,999, a significantly steeper drop than the ten-year seasonal average of 1.3%.
Persimmon and Taylor Wimpey each eased 1.7%, while Barratt Redrow slipped 1.0% as Rightmove noted that the number of homes available for sale had reached a 12-year high for this time of year.
RBC Capital Markets analyst Anthony Codling called it the worst August housing price print since 2018, citing elevated mortgage rates, geopolitical uncertainty, and the October budget as contributing factors.
Rightmove downgraded its official full-year 2026 house price growth forecast from plus 2% to “flat to down 2%”, though Mr Codling pointed to a 5% increase in buyer demand following the Prime Minister’s appointment as a modest cause for optimism.
JD Sports fell 3.2% ahead of Thursday’s trading statement, while Tesco and Sainsbury declined 3.0% and 3.2% respectively ahead of Worldpanel UK grocery market share data due on Tuesday.
On the FTSE 250, Telecom Plus bucked the broader trend with a 6.0% gain after reiterating full-year guidance and confirming customer growth was running slightly ahead of its 10% full-year target.
The pound traded at 1.3557 US dollars on Monday, firming slightly from 1.3550 dollars at Friday’s close, while the yield on the US 10-year Treasury rose to 4.71% from 4.69%.