London close: Stocks retreat as US-Iran tensions rise

(Sharecast News) - UK stocks pulled back from a six-week high on Monday as oil prices rose, with investor sentiment dampened by rising tensions between the US and Iran ahead of the expiration of their ceasefire deal on Wednesday. The FTSE 100 finished 0.6% lower at 10,609.08, after rising to 10,667.63 on Friday, its highest close since 2 March.

The Footsie was outperforming indices across Europe - owing mainly to the support provided by heavyweight oil stocks in London - with benchmarks in Frankfurt, Paris, Milan, Madrid and Zurich all down at least 1.1% each.

"The session reflected a classic oil-shock risk-off pattern in UK equities: banks, travel and cyclicals came under pressure, while energy outperformed," said Patrick Munnelly, partner of market strategy at Tickmill Group.

"For now, direction is likely to remain closely tied to developments in the Strait of Hormuz and the extent to which higher energy prices begin to feed through into the broader macro outlook."

US President Donald Trump on Sunday said an American destroyer had fired on and disabled the Iranian vessel which he claimed was trying to run the American blockade before it was boarded and seized by marines.

Meanwhile, Iran declared the key Hormuz strait closed again and fired on commercial vessels trying to transit. Tehran warned on Monday that it would retaliate for the seizure of the cargo ship and also said it would not participate in a second round of talks the US had hoped to begin before the ceasefire expires on Tuesday.

Just before the close in London, Brent crude was 5.1% higher at $94.97 a barrel, while WTI gained 5.4% to $88.39, partially rebounding after a huge drop in prices on Friday.

On home shores, a survey showed UK consumer confidence deteriorated in April, with the S&P Global consumer sentiment index falling to a 33-month low of 42.3 from 44.1 in March. Meanwhile, separate figures from Rightmove showed house prices ticked 0.8% higher in April despite a spike in mortgage rates following the outbreak of war in the Middle East.

Oil giants higher; cyclicals retreat

Oil giants BP and Shell gushed higher in tandem with oil prices, rising 3% and 2% respectively, while defensives British American Tobacco, Centrica, SSE, Vodafone and Admiral all rose as risk appetite waned.

Centrica was also higher 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.

Cyclical stocks such as banks and housebuilders slumped amid macro worries amid escalating tensions between the US and Iran, with Persimmon, Barratt Redrow and NatWest all lower.

On the downside, Metlen Energy and Antofagasta were the worst performers on the index as copper prices fell.

On the FTSE 250, Renishaw shares jumped after the UK engineering group lifted earnings and revenue guidance for the second time in three months on the back of "particularly strong" demand from customers, boosting its order book.

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

Market Movers

FTSE 100 (UKX) 10,609.08 -0.55% FTSE 250 (MCX) 22,940.21 -1.15% techMARK (TASX) 6,007.79 0.24%

FTSE 100 - Risers

Centrica (CNA) 204.30p 3.50% BP (BP.) 556.90p 2.94% Shell (SHEL) 3,274.50p 2.46% Tesco (TSCO) 494.05p 2.16% British American Tobacco (BATS) 4,224.00p 1.98% SSE (SSE) 2,516.50p 1.90% Vodafone Group (VOD) 116.60p 1.88% Reckitt Benckiser Group (RKT) 5,094.00p 1.72% Severn Trent (SVT) 3,170.00p 1.12% IG Group Holdings (IGG) 1,536.00p 1.05%

FTSE 100 - Fallers

Metlen Energy & Metals (MTLN) 33.70p -5.26% Antofagasta (ANTO) 3,783.50p -4.43% Rolls-Royce Holdings (RR.) 1,262.40p -3.68% Barratt Redrow (BTRW) 268.00p -3.35% Persimmon (PSN) 1,165.00p -3.16% Entain (ENT) 613.40p -3.07% NATWEST GROUP (NWG) 607.20p -3.00% Weir Group (WEIR) 3,090.00p -2.83% Kingfisher (KGF) 304.50p -2.78% St James's Place (STJ) 1,280.50p -2.70%

FTSE 250 - Risers

Renishaw (RSW) 4,424.00p 6.19% Ithaca Energy (ITH) 249.00p 4.75% Ceres Power Holdings (CWR) 419.60p 4.53% Harbour Energy (HBR) 272.40p 4.29% Plus500 Ltd (DI) (PLUS) 4,622.00p 3.77% Computacenter (CCC) 3,398.00p 3.66% Diversified Energy Company (DI) (DEC) 1,134.00p 3.28% Ocado Group (OCDO) 208.20p 2.16% AEP Plantations (AEP) 1,810.00p 2.14% Hays (HAS) 34.30p 1.84%

FTSE 250 - Fallers

Raspberry PI Holdings (RPI) 608.50p -8.50% Ibstock (IBST) 107.00p -5.81% Playtech (PTEC) 405.00p -5.29% Workspace Group (WKP) 332.60p -5.13% Bluefield Solar Income Fund Limited (BSIF) 76.90p -5.06% Wizz Air Holdings (WIZZ) 987.50p -5.05% Bellway (BWY) 2,004.00p -4.02% Genuit Group (GEN) 306.80p -3.82% Vistry Group (VTY) 354.00p -3.70% W.A.G Payment Solutions (EWG) 116.60p -3.64%