London midday: FTSE extends gains as markets resilient amid Mideast tensions

(Sharecast News) - London stocks had extended gains by midday on Monday despite the conflict between Iran and Israel entering its fourth day. The FTSE 100 was 0.4% firmer at 8,889.19.

Russ Mould, investment director at AJ Bell, said: "European shares were surprisingly resilient against a backdrop of uncertainty.

"Helping to prop up FTSE 100 was continued strength in oil prices as tensions remained high in the Middle East. Crude oil rose 1.1% to $72 per barrel, driving shares in FTSE heavyweights BP and Shell and taking the broader market upwards in the process.

"Global oil prices jumped last week after Israel attacked Iran, raising concerns about major disruptions to supply. Despite a weekend of violence between the two countries, investors showed no signs of panicking, judging by movements in financial markets on Monday. Future prices imply a positive day for Wall Street when US markets open later on.

"The gold price is often a measure of investor sentiment, going up when people are worried and going down when they're optimistic. The precious metal slipped 0.6% to $3,432 per ounce which indicates that investors remain alert to ongoing geopolitical tensions but they're not reaching for their tin hats.

"The Middle East conflict remains a fluid situation and there is the potential for markets to still experience sudden jolts if the tension escalates further."

Away from geopolitics, all eyes will be on central bank policy announcements this week, with decisions due from the Bank of Japan on Tuesday, the Federal Reserve and Riksbank on Wednesday and Norges Bank, the Bank of England and the Swiss National Bank on Thursday.

"We expect all but the SNB to stay on hold and expect the SNB to cut the rate 25bp to 0%," Danske Bank said.

On the macro front, there was some encouraging news from China, where figures from the National Bureau of Statistics showed that retail sales growth jumped to a 15-month high in May.

Retail sales surged 6.4% year-on-year in May to 4.13trn yuan ($575bn), following 5.1% growth in April. That was well ahead of the 5.0% consensus estimate and the strongest rate of growth since December 2023, as urban retail sales grew 6.5% and rural sales gained 5.4%.

The acceleration was thought to be a result of increased spending during Labor Day (1 May) and the Dragon Boat Festival (31 May), while stimulus packages by Beijing to promote domestic consumption also helped as the economy began to feel the impacts of its trade war with Washington.

Retail sales over the first five months of the year totalled CNY20.32trn, up 5% over last year.

On home shores, the latest house price index from Rightmove showed that house prices eased in June following stronger-than-expected growth in April and May.

Prices eased by 0.4% in June, compared to a 0.6% uplift in May and April's 1.4% jump. The average asking price is now £378,240.

Rightmove said the fall was unusual for June. The average June increase has been 0.4% over the last ten years.

However, it noted that the dip followed "stronger-than-expected price growth in April and May, and appears to be part of a delayed response to increased stamp duty tax".

Changes to stamp duty thresholds came into effect in April, causing a rush of sales as people hurried to complete ahead of the deadline.

Agreed sales were 6% higher year-on-year in June, the highest number of sales agreed in any month since March 2022.

Rightmove's Colleen Babcock said: "It appears that we're now seeing the decade-high level of homes for sale, and the recent stamp duty increases in England, have a delayed impact on new sellers' pricing.

"Agents have been telling us that sellers need to set a competitive price to have a better chance of finding a buyer in the current market, and it looks like many are listening and responding to that message.

"Such realistic pricing will remain key in the coming months."

Year-on-year, house prices rose 0.8% in May.

In equity markets, gambling and sports betting group Entain surged to the top of the FTSE 100 after it upgraded its guidance for BetMGM following a strong first half from the US division.

Asia-focused Standard Chartered and Prudential were in the black after the upbeat Chinese retail sales data.

Oil majors BP and Shell gushed higher as oil prices rose again amid tensions in the Middle East.

Shares in Spectris rallied after it rebuffed a takeover approach from US private equity giant KKR, fuelling hopes of a potential bidding war. The British manufacturer of high-tech scientific instruments is already in discussions with American buyout firm Advent International regarding a possible cash offer of £37.63 per share, or £4.4bn including debt.

Metro Bank shares sparked following reports over the weekend that it has been approached by private equity firm Pollen Street Capital about a possible takeover.

Market Movers

FTSE 100 (UKX) 8,889.19 0.44% FTSE 250 (MCX) 21,316.73 0.68% techMARK (TASX) 5,108.79 0.47%

FTSE 100 - Risers

Entain (ENT) 835.40p 11.18% Intermediate Capital Group (ICG) 1,970.00p 2.55% Standard Chartered (STAN) 1,173.50p 2.44% Smurfit Westrock (DI) (SWR) 3,213.00p 2.19% Rentokil Initial (RTO) 355.20p 1.98% International Consolidated Airlines Group SA (CDI) (IAG) 322.40p 1.80% Vodafone Group (VOD) 75.02p 1.79% IMI (IMI) 2,084.00p 1.76% Schroders (SDR) 362.00p 1.74% Melrose Industries (MRO) 479.50p 1.48%

FTSE 100 - Fallers

WPP (WPP) 542.40p -1.56% Auto Trader Group (AUTO) 803.80p -1.47% Haleon (HLN) 390.90p -1.31% SEGRO (SGRO) 683.40p -1.19% Hikma Pharmaceuticals (HIK) 2,110.00p -0.85% GSK (GSK) 1,500.00p -0.76% Next (NXT) 12,700.00p -0.55% Marks & Spencer Group (MKS) 372.30p -0.53% Pershing Square Holdings Ltd NPV (PSH) 3,878.00p -0.46% Diageo (DGE) 1,941.00p -0.46%

FTSE 250 - Risers

Spectris (SXS) 3,330.00p 5.45% Playtech (PTEC) 339.50p 4.46% W.A.G Payment Solutions (WPS) 81.00p 3.85% Abrdn (ABDN) 191.00p 2.85% Diversified Energy Company (DEC) 1,074.00p 2.78% Paragon Banking Group (PAG) 913.50p 2.76% Man Group (EMG) 175.10p 2.70% WH Smith (SMWH) 1,108.00p 2.50% Bridgepoint Group (Reg S) (BPT) 289.60p 2.48% SDCL Efficiency Income Trust (SEIT) 50.30p 2.44%

FTSE 250 - Fallers

Hochschild Mining (HOC) 251.00p -2.79% Endeavour Mining (EDV) 2,346.00p -2.25% Raspberry PI Holdings (RPI) 470.40p -2.04% Mobico Group (MCG) 26.20p -1.95% ITV (ITV) 81.95p -1.80% Energean (ENOG) 803.00p -1.71% JPMorgan Indian Investment Trust (JII) 1,068.00p -1.48% Bellevue Healthcare Trust (Red) (BBH) 122.20p -1.29% PayPoint (PAY) 798.00p -0.87% Telecom Plus (TEP) 2,045.00p -0.73%