London close: Stocks fall for second day amid Middle East, political uncertainty

(Sharecast News) - UK stocks ended a choppy day slightly lower as investors assessed fresh geopolitical developments in the Middle East and comments from Andy Burnham, Labour's frontrunner to be the new prime minister.

The FTSE 100 finished down 0.2% at 10,484.22, marking its second day in the red after finishing at a two-month high last Thursday, with losses in the housebuilding and mining sectors weighing on the benchmark index.

"Investors weren't sure whether to be bullish or bearish amid yet another setback in the Middle East peace deal," said Dan Coatsworth, head of markets at AJ Bell.

The US and Iran announced on Sunday that they would pause hostilities, renew talks and allow commercial vessels to transit the Strait of Hormuz freely after military exchanges over the weekend.

Tensions had flared after Iran fired at an oil tanker in the Strait of Hormuz, prompting US strikes on Iranian installations before Tehran launched drone and missile attacks against Bahrain and Kuwait on Sunday. Both sides were supposed to be at the start of a 60-day negotiation period towards a ceasefire.

As a result of the renewed conflict, oil prices were on the rise with Brent up 1.9% at $73.98 a barrel by the close of plan.

"Reports from the US implied everything would be sorted out after a weekend of renewed fighting, but investors are getting tired of hearing the same thing without results."

On home shores, Andy Burnham was giving his first speech since launching a bid to become Prime Minister, in which he announced plans to devolve power away from London by moving part of his prime ministerial operation to the North.

Bond yields fell slightly after Burnham said he wanted devolution "backed by the stability that comes from sound public finances ... and the discipline of our current fiscal rules". Traders had been fretting, without foundation, that the centrist Burnham would embark on a public spending spree.

Meanwhile, investors were digesting the latest figures from the Bank of England, which showed that mortgage approvals fell in May to the lowest level since December 2023. The latest Money and Credit report showed that mortgage approvals declined to 56,200 from 66,000 in April, coming in below the average of 63,300 over the previous six months. Net borrowing of mortgage debt declined to �2.9bn in May from �4.4bn a month earlier, while the effective interest rate on newly-drawn mortgages increased to 4.22% from 4.08%.

Housebuilders, miners fall

Housebuilders Barratt Redrow and Persimmon were in the red after the disappointing mortgage approvals data, along with smaller peers Vistry and Bellway.

Mining stocks were also out of favour as risk appetite declined, with Fresnillo, Antofagasta and Anglo American among the worst performers on the Footsie.

Babcock International was under the cosh on news the UK has abandoned plans to replace its ageing warships with a new destroyer and instead announced that it will procure at least six so-called common combat vessels.

British American Tobacco slumped as it revealed plans to cut 5,500 jobs as part of its Fit2Win transformation programme that aims to save �600m in costs each year. The plan, which was first launched in 2025, was designed to make the tobacco, cigarettes and smokeless products group "more agile, cost disciplined and innovative".

On the FTSE 250, shares in Bridgepoint surged as the UK private equity group said it was buying the real estate arm of US investment firm Kayne Anderson for $1.4bn, making its first move into the US property sector.

Market Movers

FTSE 100 (UKX) 10,484.22 -0.23%

FTSE 250 (MCX) 23,014.85 -0.57%

techMARK (TASX) 5,877.71 -0.21%

FTSE 100 - Risers

Metlen Energy & Metals (MTLN) 42.20p 2.83%

Entain (ENT) 591.40p 2.35%

Lion Finance Group (BGEO) 11,110.00p 2.21%

Flutter Entertainment (DI) (FLTR) 7,800.00p 2.15%

SSE (SSE) 2,459.00p 1.57%

Experian (EXPN) 2,551.00p 1.15%

Convatec Group (CTEC) 213.80p 1.04%

ICG (ICG) 1,670.00p 1.03%

The Sage Group (SGE) 825.20p 0.93%

Scottish Mortgage Inv Trust (SMT) 1,424.00p 0.92%

FTSE 100 - Fallers

Babcock International Group (BAB) 921.00p -5.15%

Fresnillo (FRES) 2,781.00p -2.90%

Persimmon (PSN) 1,082.00p -2.48%

Anglo American (AAL) 3,627.00p -2.45%

Barratt Redrow (BTRW) 283.80p -2.24%

Whitbread (WTB) 2,404.00p -2.08%

Antofagasta (ANTO) 3,747.00p -2.04%

Vodafone Group (VOD) 103.45p -1.90%

3i Group (III) 2,496.00p -1.62%

British Land Company (BLND) 415.00p -1.61%

FTSE 250 - Risers

Bridgepoint Group (Reg S) (BPT) 270.00p 15.58%

Trustpilot Group (TRST) 253.60p 5.67%

Foresight Group Holdings Limited NPV (FSG) 431.00p 5.12%

Ceres Power Holdings (CWR) 474.20p 5.10%

Aston Martin Lagonda Global Holdings (AML) 38.64p 4.43%

Playtech (PTEC) 321.00p 4.15%

Syncona Limited NPV (SYNC) 106.00p 3.92%

GB Group (GBG) 198.20p 3.34%

Moonpig Group (MOON) 239.20p 3.10%

RTW Biotech Opportunities Ltd (RTW) 2.40p 3.00%

FTSE 250 - Fallers

Shawbrook Group (SHAW) 319.50p -7.93%

AEP Plantations (AEP) 146.86p -6.38%

Close Brothers Group (CBG) 421.80p -5.17%

Vistry Group (VTY) 255.40p -4.20%

Helios Towers (HTWS) 205.60p -4.10%

Pan African Resources (PAF) 98.40p -4.00%

Breedon Group (BREE) 298.20p -3.87%

Hays (HAS) 32.40p -3.86%

Victrex plc (VCT) 577.00p -3.51%

Genuit Group (GEN) 276.40p -3.29%