The FTSE 100 ended virtually unchanged on Monday as escalating hostilities between the United States and Iran pushed oil prices sharply higher.
London’s benchmark index closed up just 1.00 point at 10,498.29, reflecting a broadly cautious mood among investors watching events in the Middle East.
The FTSE 250 ended up 25.17 points, or 0.1%, at 23,396.58, while the AIM All-Share fell 2.68 points, or 0.4%, to 761.14.
The US struck Iran for the second consecutive day on Monday, prompting Tehran to retaliate against US allies in the Gulf as both sides clashed over control of the Strait of Hormuz.
President Donald Trump vowed to charge all cargo shipped through the vital waterway, posting on Truth Social: “The Hormuz Strait is OPEN. We are reinstating THE IRANIAN BLOCKADE.”
Trump added the US “will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security” through the strait.
Brent crude for September delivery climbed to 79.42 dollars a barrel on Monday, up from 75.86 dollars on Friday, as traders priced in the heightened geopolitical risk.
Susannah Streeter, chief investment strategist at Wealth Club, warned: “While (oil) prices are still not at crisis levels, the creep upwards will ignite fresh inflationary worries and concerns about how far higher interest rates could move.”
The rising oil price lifted energy majors in London, with BP (BP.L) advancing 4.6% and Shell (SHEL.L) gaining 2.3% by the close.
Shell also announced the 1.8 billion-dollar sale of Solenergi Power, which includes the Sprng Energy group of companies, to Aditya Birla Renewables.
Technology stocks weighed heavily on Wall Street, with the Dow Jones down 0.2%, the S&P 500 lower by 0.4%, and the Nasdaq Composite declining 0.8%.
Asian markets suffered steep losses, with South Korea’s Kospi shedding 9.0%, while SK Hynix fell 15% and Samsung Electronics dropped 11% in Seoul.
In New York, SK Hynix ADRs fell 6.7%, while ARM, Marvell Technology, and Micron Technology dropped 5.1%, 4.8%, and 4.0% respectively.
Housebuilders bucked the cautious trend in London after the Times reported that likely incoming prime minister Andy Burnham is considering reviving the Help to Buy scheme when he enters office next week.
On the FTSE 100, Persimmon and Barratt Redrow rose 2.9% and 1.5% respectively, while FTSE 250-listed Taylor Wimpey climbed 2.1%.
Recruitment firms led the FTSE 250 risers, with PageGroup surging 20% and Hays climbing 14% after both companies delivered stronger-than-expected trading updates.
PageGroup reported gross profit rising 1.3% in the second quarter of 2026 to £197.6 million from £195.2 million a year prior, beating analyst expectations of a 5% constant currency decline.
Dan Coatsworth, head of markets at AJ Bell, cautioned: “Last month, PageGroup’s shares hit a 23-year low as market pessimism engulfed the stock. The second quarter commentary has clearly helped to improve sentiment, but certain investors might need more convincing than just one solid trading update.”
Watches Of Switzerland Group climbed 4.2% ahead of a trading statement on Tuesday, with Reuters reporting the luxury watch retailer has held talks in recent months over potential offers to take it private.
Gold fell to 4,015.30 dollars an ounce from 4,101.39 dollars on Friday, weighing on Fresnillo and Endeavour Mining, which dropped 2.9% and 2.2% respectively on the FTSE 100.