London stocks moved lower on Monday as escalating tensions between the United States and Iran drove oil prices above $90 a barrel. At the same time, investors assessed the arrival of Andy Burnham as Britain’s new Prime Minister.
The FTSE 100 declined 0.5% to 10,543.91 points during morning trading, while the domestically focused FTSE 250 slipped 0.1%. Concerns about disruption to global energy supplies weighed on market sentiment following a ninth consecutive night of US strikes on Iran.
Hormuz in Focus
The situation around the Strait of Hormuz remained a particular concern for investors after reports that several tankers had been immobilised. Iran has threatened to prevent oil and gas from passing through the strategically important waterway if US military action continues.
Brent crude climbed above $90 a barrel for the first time in a month. Higher energy prices renewed concerns about inflation, business costs and the future direction of interest rates in Britain and Europe.
Industries particularly exposed to fuel prices were among the biggest fallers. UK automobile stocks declined by around 1%, while the travel and leisure sector dropped 0.7%.
Ryanair Slumps
Ryanair shares tumbled 7.2% after the airline reported a 34% fall in first-quarter profit after tax. Profit dropped to €538 million from €820 million a year earlier, as higher fuel costs and weaker fares weighed on performance. Revenue increased by just 1% to €4.38 billion.
The airline also warned that summer ticket prices could remain under pressure due to economic uncertainty, later bookings, and concerns surrounding the Middle East conflict.
Big Yellow Dips
Big Yellow shares fell 2% following its first-quarter trading update. The self-storage company reported that like-for-like occupancy declined by 0.2 percentage points to 79.2%, although like-for-like revenue increased 2% to £52.2 million.
Tech Holds Firm
Technology stocks provided some support to the wider market, rising 0.5% ahead of quarterly results from major US companies, including Alphabet, Tesla and Intel.
Burnham Takes Over
Investors were also monitoring Britain’s political transition as Keir Starmer formally stepped down and Andy Burnham took office as the country’s new Prime Minister. Markets are now waiting for details of Burnham’s economic programme and Cabinet appointments.
Government bond yields edged higher as investors considered how the new administration may approach taxation, public spending and the UK’s fiscal rules. However, geopolitical tensions and rising energy prices remained the most immediate pressures on London markets.
