London's FTSE 100 finished Monday almost exactly where it started as traders weighed a weekend escalation between the US and Iran. Shell and BP traded higher while airlines came under pressure from rising oil costs, and the blue-chip benchmark ended little changed on the day.
The FTSE 100 ended little changed at 0.02% in the red on Monday, as investors assessed the exchange of hostilities between the US and Iran over the weekend, with Tehran claiming the effective closure of the Strait of Hormuz. By the close, the London benchmark finished at 10,498.29 points, up 1.00 point, or roughly 0.01%, from the previous close.
A choppy session beneath a flat close
The headline number masked a turbulent day. The index spiked as high as 10,532.10 within the first hour of trading, then slid to an intraday low of 10,465.00 by early afternoon before recovering into the close. The index carries a 52-week high of 10,934.94 and a 52-week low of 8,926.55.
Brent crude pushed toward multi-month highs as the conflict escalated. London carries a heavy weighting toward energy majors such as Shell and BP, both of which traded higher on the day.
Winners and losers on the day
International Consolidated Airlines Group fell 2.25% to rank among the worst performers, as higher Brent crude prices fueled concerns over rising jet fuel costs. Deutsche Bank Research nonetheless raised its price target on the airline group to 6.45 pounds from 5.40 pounds while reiterating its buy rating.
On the upside, Computacenter jumped 2.43% after BofA Global Research began coverage with a buy rating, noting the technology and services provider is benefiting from rapid growth in AI-related infrastructure investment. GSK closed off 0.41% after its phase 2 Azur-1 trial met its primary objective.
Inflation risk keeps rates in focus
Berenberg said the attacks on shipping in the Strait of Hormuz and US retaliation highlight the upside risk to its inflation forecast. The firm added that investors' belief the Bank of England will raise interest rates if oil prices rise again works as an insurance policy that bears down on demand each time the US-Iran conflict flares up.
Traders next receive the UK's monthly GDP report for May on Thursday, before Andy Burnham's widely expected confirmation as Labour Party leader on Friday and as prime minister on July 20.
Sources: Yahoo Finance UK, BBN Times
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