London midday: FTSE dips into the red amid escalating US-Iran tensions

(Sharecast News) - London stocks had dipped into the red by midday on Monday as oil prices rose amid escalating tensions between the US and Iran, with US earnings season due to kick off this week.

The FTSE 100 was 0.2% lower at 10,472.30, reversing earlier gains, while Brent crude was up 3.3% at $78.55 a barrel and West Texas Intermediate was 3.4% higher at $73.86 as the US insisted the Strait of Hormuz was open, despite Iran claiming it had closed the vital waterway following further military exchanges.

The US Central Command (Centcom) said on Saturday that it had struck more than 140 targets across Iran in response to Tehran attacking another commercial ship in the Strait of Hormuz.

"US forces hit approximately 140 Iranian military targets with precision munitions launched by land- and sea-based fighter aircraft, drones, and naval vessels," it said. Targets included Iranian missile and drone sites, naval capabilities, ammunition storage facilities, communication networks, and coastal surveillance locations.

Centcom said that during three nights of strikes last week, it struck more than 300 targets "to degrade Iran's ability to attack civilian mariners and commercial vessels freely transiting the strait".

"Commercial vessel transits through the vital international maritime corridor continue," it added.

On Sunday, Centcom said it had completed a new wave of strikes against Iran, hitting dozens of targets at multiple locations with precision munitions. US forces struck Iranian military air-defence systems, coastal radar sites, missile and drone capabilities, and small boats. "The Strait of Hormuz is a vital maritime corridor for global trade," it said, adding that "Iran does not control it".

In retaliation for the US strikes on Saturday, Iran fired missiles and drones at the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain early on Sunday morning.

Susannah Streeter, chief investment strategist at Wealth Club, said: "US military forces hit dozens of sites in an attempt to wrest control of the Strait of Hormuz from Iran, and Tehran has retaliated by hitting US bases in the region. The war has underlined the huge importance of the waterway, which is so vital for shipments from the region. The Strait has become the United States' Achilles' heel in this conflict and Iran's strongest bargaining chip. It's a strategic chokepoint that gives Tehran disproportionate leverage despite America's overwhelming military superiority.

"With the chance of negotiations seizing up again, and this fresh flare-up of attacks, it's sent oil prices racing up 4% above $79 a barrel. European and UK gas prices have also surged, back up to levels last seen a month ago. While prices are still not at crisis levels, the creep upwards will ignite fresh inflationary worries and concerns about how far higher interest rates could move. That's being reflected in the bond markets, with yields on gilts and US Treasuries rising, demonstrating how investors are becoming increasingly skittish about how far central bank policy will have to move to keep a lid on inflation."

Looking ahead to the rest of the week, the US earnings season will kick off in earnest on Tuesday, with quarterly results due from banking giants JPMorgan, Bank of America, Goldman Sachs, Citigroup and Wells Fargo.

In UK equity markets, fintech group Plus500 tumbled despite reporting a record first-half performance and backing its full-year guidance.

Oxford Nanopore fell sharply as it said first-half trading was below management expectations, mainly due to a revenue decline in China, which reflected enhanced export control restrictions and changes to commercial operations in the region.

BA and Iberia owner IAG and budget airline Wizz Air both flew lower amid concerns about rising fuel costs.

On the upside, BP and Shell gushed higher in tandem with oil prices.

Recruiter PageGroup surged as it held annual guidance after a rise in second-quarter gross profit driven by a strong performance in the Americas, offsetting weaker trading in France, Northern Europe and the UK. The recruiter did also warn of "a high degree of uncertainty in the outlook for the rest of the year", however. Peer Hays also advanced.

Computacenter gained following an initiation at 'buy' by Bank of America.

Market Movers

FTSE 100 (UKX) 10,472.30 -0.24%

FTSE 250 (MCX) 23,303.22 -0.29%

techMARK (TASX) 5,920.65 0.32%

FTSE 100 - Risers

Vodafone Group (VOD) 115.00p 4.36%

BT Group (BT.A) 195.45p 2.82%

Persimmon (PSN) 1,068.00p 2.80%

Computacenter (CCC) 4,576.00p 2.78%

BP (BP.) 494.15p 2.51%

JD Sports Fashion (JD.) 85.64p 2.24%

Pearson (PSON) 1,291.50p 1.97%

Airtel Africa (AAF) 332.80p 1.90%

Entain (ENT) 560.60p 1.85%

Barratt Redrow (BTRW) 285.30p 1.43%

FTSE 100 - Fallers

IG Group Holdings (IGG) 1,754.00p -2.99%

International Consolidated Airlines Group SA (CDI) (IAG) 461.80p -2.10%

Fresnillo (FRES) 2,591.00p -1.78%

St James's Place (STJ) 1,135.50p -1.69%

AstraZeneca (AZN) 12,618.00p -1.62%

British American Tobacco (BATS) 4,399.00p -1.57%

Scottish Mortgage Inv Trust (SMT) 1,455.00p -1.45%

Halma (HLMA) 3,604.00p -1.42%

Standard Chartered (STAN) 2,094.00p -1.41%

Babcock International Group (BAB) 997.60p -1.38%

FTSE 250 - Risers

Pagegroup (PAGE) 143.70p 11.83%

Hays (HAS) 46.00p 6.55%

Dr. Martens (DOCS) 74.20p 4.06%

Vistry Group (VTY) 254.40p 3.43%

WPP (WPP) 283.70p 3.24%

Victrex plc (VCT) 694.00p 2.51%

Trainline (TRN) 229.80p 2.50%

Harbour Energy (HBR) 222.80p 2.48%

Telecom Plus (TEP) 882.00p 2.32%

Ithaca Energy (ITH) 224.90p 2.27%

FTSE 250 - Fallers

Plus500 Ltd (DI) (PLUS) 4,152.00p -16.16%

Oxford Nanopore Technologies (ONT) 113.30p -6.40%

Pacific Horizon Inv Trust (PHI) 1,066.00p -4.99%

Raspberry PI Holdings (RPI) 798.00p -4.75%

IP Group (IPO) 62.70p -4.41%

Ceres Power Holdings (CWR) 444.20p -3.60%

Templeton Emerging Markets Inv Trust (TEM) 313.00p -2.95%

JPMorgan Emerging Markets Growth & Income (JMGI) 166.00p -2.81%

CMC Markets (CMCX) 729.00p -2.80%

Wizz Air Holdings (WIZZ) 1,151.00p -2.37%