London open: FTSE falls, oil rises as US-Iran tensions ramp up again

(Sharecast News) - London stocks fell in early trade on Monday, while oil prices rose as tensions between the US and Iran ramped up again and after the US intercepted an Iranian cargo ship trying to breach its maritime blockade. At 0825 BST, the FTSE 100 was down 0.4% at 10,630.55, while Brent crude was up 4.6% at $94.95 a barrel. Despite the losses, the top-flight index was faring better than European peers thanks to its heavy weighting in oil majors.

Richard Hunter, head of markets at Interactive Investor, said: "An all too familiar theme has emerged, with markets taking two step forwards and then one step back, and almost entirely driven by news flow from the Middle East.

"On Friday, Iran reportedly declared that the Strait of Hormuz was 'completely open', lighting a fire under stocks and in particular those affected by the conflict so far, such as the airlines and cruise ship operators, while oil prices plummeted on the prospect of some kind of return to normality.

"However, as has been the case over the last couple of months, a weekend packed with developments will set the tone for the beginning of this week. Iran apparently declined to join another round of peace talks ahead of the impending ceasefire deadline this week, while President Trump announced on Sunday that the US had fired on and seized an Iranian cargo ship, while the blockade in the Strait remained in full force.

"While short-term traders are attempting to navigate a parlous course which involves violent swings and uncertainty, longer term investors are tending to look through the noise and concentrate on a return to normality with a relatively benign economic backdrop currently in place. The FTSE 100 has been something of a poster child for this investment mentality, and despite a weaker open after the weekend's developments, the index remains firmly ahead by 7% in the year to date."

On home shores, industry data showed house prices ticked higher in April despite a spike in mortgage rates following the outbreak of war in the Middle East.

According to the latest house price index from Rightmove, prices rose 0.8%, taking the average asking price up to £373,971. This is despite the average two-year fixed mortgage rate now standing at 5.42%, compared to 4.25% before the US first attacked Iran at the end of February.

Stiff competition among sellers further supported prices, with the number of homes for sale at an 11-year high for the time of year.

In equity markets, BA and Iberia owner IAG, Wizz Air, easyJet and cruise operator Carnival were among the worst performers.

On the upside, oil giants BP and Shell were the top performers on the FTSE 100 as oil prices rose. Ithaca, Harbour Energy and Diversified Energy also racked up strong gains.

Centrica was a high riser as Citi reiterated its 'buy' rating on the shares and said any weakness was a buying opportunity following the share price fall on Friday after Chancellor Rachel Reeves said the government was considering cutting the link between electricity and gas prices.

Severn Trent and United Utilities were also in the black, recovering from Friday's losses.

Engineering group Renishaw surged as it lifted earnings and revenue guidance for the second time in three months on the back of "particularly strong" demand from the semiconductor and electronics manufacturing equipment, and defence & aerospace sectors.

Fintech group Plus500 also advanced as it bumped up its full-year profit outlook following a "strong" first-quarter performance.

Market Movers

FTSE 100 (UKX) 10,630.55 -0.35% FTSE 250 (MCX) 23,038.12 -0.72% techMARK (TASX) 5,998.97 0.09%

FTSE 100 - Risers

BP (BP.) 558.80p 3.40% Shell (SHEL) 3,277.50p 2.80% Reckitt Benckiser Group (RKT) 5,150.00p 2.64% Tesco (TSCO) 491.30p 1.86% Severn Trent (SVT) 3,179.00p 1.47% Centrica (CNA) 200.10p 1.29% United Utilities Group (UU.) 1,358.50p 1.23% British American Tobacco (BATS) 4,189.00p 1.16% Glencore (GLEN) 550.20p 0.99% Imperial Brands (IMB) 2,799.50p 0.88%

FTSE 100 - Fallers

Fresnillo (FRES) 3,650.00p -3.53% Antofagasta (ANTO) 3,819.00p -3.07% International Consolidated Airlines Group SA (CDI) (IAG) 398.90p -2.68% NATWEST GROUP (NWG) 610.00p -2.56% Rolls-Royce Holdings (RR.) 1,279.20p -2.37% Persimmon (PSN) 1,174.00p -2.33% Burberry Group (BRBY) 1,168.40p -2.16% Barclays (BARC) 444.00p -1.98% Melrose Industries (MRO) 556.80p -1.90% Entain (ENT) 622.40p -1.90%

FTSE 250 - Risers

Renishaw (RSW) 4,490.00p 7.78% Ithaca Energy (ITH) 249.90p 5.51% Harbour Energy (HBR) 272.20p 4.21% Diversified Energy Company (DI) (DEC) 1,136.00p 3.64% Plus500 Ltd (DI) (PLUS) 4,580.00p 3.59% Computacenter (CCC) 3,364.00p 3.05% Bluefield Solar Income Fund Limited (BSIF) 83.20p 2.72% IntegraFin Holding (IHP) 350.50p 2.34% Telecom Plus (TEP) 1,396.00p 1.76% Spire Healthcare Group (SPI) 167.40p 1.71%

FTSE 250 - Fallers

Wizz Air Holdings (WIZZ) 992.50p -4.71% easyJet (EZJ) 379.00p -4.03% Vistry Group (VTY) 353.20p -3.92% Pan African Resources (PAF) 160.84p -3.83% Raspberry PI Holdings (RPI) 640.50p -3.68% Ibstock (IBST) 110.00p -3.17% Carnival (CCL) 2,115.00p -2.85% Genuit Group (GEN) 311.60p -2.82% Travis Perkins (TPK) 579.00p -2.68% Shawbrook Group (SHAW) 369.75p -2.65%