London open: Stocks edge up despite Middle East tensions

(Sharecast News) - London stocks edged higher in early trade on Monday despite the conflict between Iran and Israel entering its fourth day. At 0845 BST, the FTSE 100 was 0.2% firmer at 8,867.20.

Neil Wilson, UK investor strategist at Saxo Markets, said: "The weekend brought more fire and brimstone but investors are taking the long view: Israel and Iran exchanged strikes for a fourth day on Monday but markets seemed to be moving towards relative calm after an initial risk-off move on Friday, with investors discounting a limited regional trading of blows rather than the start of WW3.

"Stocks tumbled at the end of last week with the Dow shipping over 700 points and the S&P 500 sliding over 1% to drag the indices lower for the week, while gold and oil rallied. So far the relative calm in the market early on Monday morning indicates investors assume a limited conflict and not much wider conflagration - depends on US/Russia and so far there does not seem to be appetite to stoke the fire further. Geopolitical risk is everywhere but always discounted."

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 as national holidays and government efforts to encourage spending despite additional trade tariffs from the US.

Retail sales surged 6.4% year-on-year in May to 4.13trn yuan ($575bn), following 5.1% growth in April, according to the National Bureau of Statistics.

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 jumped 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, while miners also gained, with Anglo American, Glencore and Antofagasta all up.

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

Spectris rallied after saying on Friday that it had rejected a second takeover approach from private equity firm KKR. Spectris had said earlier in the week that it would be minded to recommend a takeover approach from Advent if a formal offer was made.

Metro Bank shares surged 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) 8,867.20 0.19% FTSE 250 (MCX) 21,203.90 0.14% techMARK (TASX) 5,093.59 0.17%

FTSE 100 - Risers

Entain (ENT) 793.40p 5.59% Standard Chartered (STAN) 1,173.00p 2.40% BP (BP.) 393.60p 1.88% Anglo American (AAL) 2,152.00p 1.82% Prudential (PRU) 902.40p 1.67% Glencore (GLEN) 296.10p 1.51% Shell (SHEL) 2,668.00p 1.41% Barclays (BARC) 323.60p 1.35% Rolls-Royce Holdings (RR.) 881.20p 1.29% Antofagasta (ANTO) 1,813.50p 1.26%

FTSE 100 - Fallers

Pershing Square Holdings Ltd NPV (PSH) 3,826.00p -1.80% Haleon (HLN) 389.80p -1.59% GSK (GSK) 1,490.00p -1.42% Smith & Nephew (SN.) 1,083.00p -1.01% SEGRO (SGRO) 685.00p -0.95% Severn Trent (SVT) 2,681.00p -0.89% Unilever (ULVR) 4,594.00p -0.88% Diageo (DGE) 1,934.50p -0.79% Hikma Pharmaceuticals (HIK) 2,112.00p -0.75% United Utilities Group (UU.) 1,157.00p -0.73%

FTSE 250 - Risers

Spectris (SXS) 3,312.00p 4.88% Raspberry PI Holdings (RPI) 492.70p 2.60% Diversified Energy Company (DEC) 1,071.00p 2.49% Aston Martin Lagonda Global Holdings (AML) 86.55p 2.43% Marshalls (MSLH) 274.50p 2.23% NCC Group (NCC) 168.20p 2.06% ICG Enterprise Trust (ICGT) 1,368.00p 1.79% Templeton Emerging Markets Inv Trust (TEM) 183.40p 1.66% Edinburgh Worldwide Inv Trust (EWI) 167.40p 1.58% Burberry Group (BRBY) 1,116.50p 1.55%

FTSE 250 - Fallers

Bridgepoint Group (Reg S) (BPT) 270.00p -4.46% Energean (ENOG) 793.00p -2.94% RHI Magnesita N.V. (DI) (RHIM) 2,720.00p -2.68% Endeavour Mining (EDV) 2,352.00p -2.00% Avon Technologies (AVON) 1,704.00p -1.62% ITV (ITV) 82.25p -1.44% Foresight Group Holdings Limited NPV (FSG) 391.00p -1.39% PayPoint (PAY) 794.00p -1.37% Bodycote (BOY) 554.00p -1.34% THG (THG) 25.12p -1.34%