London midday: FTSE falls as defence firms, housebuilders drop

(Sharecast News) - London stocks had fallen by midday on Monday as defence companies and housebuilders lost ground, while oil prices edged up as the US and Iran agreed to halt hostilities after exchanging strikes over the weekend.

The FTSE 100 was down 0.3% at 10,477.76 following a steady start, while Brent crude was up 0.7% at $72.49 a barrel and West Texas Intermediate was 1.1% higher at $69.96.

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.

Susannah Streeter, chief investment strategist at Wealth Club, said: "The Footsie is on the back foot at the start of the week as investors assess fresh skirmishes in the Middle East, with few catalysts around to spark more optimism.

"Brent crude has risen above $72 a barrel, after strikes were reported on ships in the Strait of Hormuz and the US military retaliated. But gains appear to be capped, given that talks are still expected to go ahead between the US and Iran in Doha tomorrow.

"Inevitably, with the threat of attacks hanging over the Strait, it's still a tense time for shipowners. While the key waterway may have reopened, it's far from business as usual. Shipowners are still navigating an uneasy route, with elevated war-risk insurance premiums and lingering bottlenecks adding to the cost of transit. Another cloud hanging over the waterway is the prospect of tolls for passing through the strait.

"Although vessels are currently getting through without charge under the temporary agreement, Iranian officials have continued to hint that 'service fees' could be introduced once the 60-day period expires. Whether those proposals ever become reality is far from certain, given the legal and diplomatic hurdles involved, but even the possibility is enough to keep shipping companies on edge. It's another reminder that while the immediate threat has eased, the risk premium attached to one of the world's most important trade arteries is unlikely to disappear overnight."

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.

On the macroeconomic front, 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. Approvals for remortgaging - which only capture remortgaging with a different lender - also fell, to 33,300 in May from 51,200 in April.

Net borrowing of mortgage debt declined to �2.9bn in May from �4.4bn a month earlier, while the effect interest rate - the actual interest paid - on newly-drawn mortgages increased to 4.22% from 4.08%.

The report also showed that net borrowing of consumer credit was largely unchanged on the month at �1.7bn, with borrowing through credit cards of �0.6bn, down from �0.8bn in April. Net borrowing through other forms of consumer credit such as car dealership finance and personal loans rose to �1.1bn in May from �0.9bn a month earlier.

Households' deposits with banks and building societies increased by �5.4bn following net deposits of �5.7bn in April. The BoE said this was driven by households depositing an additional �3.1bn into ISAs and �1.3bn into interest-bearing time accounts.

In equity markets, Babcock tumbled while BAE Systems also fell on news the UK has abandoned plans to replace its ageing warships with a new destroyer and will instead procure at least six so-called common combat vessels.

British American Tobacco retreated 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.

Housebuilders slumped after the BoE mortgage data, with Persimmon, Barratt, Vistry, Bellway and Taylor Wimpey all down.

On the upside, Lion Finance was among the risers after JPMorgan hiked its price target on the stock.

BT Group gained as the company said that it and Verizon Communications have agreed to combine their international operations in a 50:50 joint venture. The two telecoms firms will hold equal voting rights, with Verizon paying BT an equalisation payment of $645m.

Private equity group Bridgepoint surged as it announced it was buying the real estate arm of US investment firm Kayne Anderson for $1.4bn, as it makes a move into the US property sector. The deal comprises $759m in cash and around 189m newly-issued Bridgepoint shares.

Plus500 advanced as it announced the launch of sports event-based contracts in the US, expanding its prediction markets offering there.

Market Movers

FTSE 100 (UKX) 10,477.76 -0.29%

FTSE 250 (MCX) 23,109.32 -0.16%

techMARK (TASX) 5,889.28 -0.01%

FTSE 100 - Risers

Flutter Entertainment (DI) (FLTR) 7,900.00p 3.46%

Lion Finance Group (BGEO) 11,190.00p 2.94%

Computacenter (CCC) 4,328.00p 1.65%

Scottish Mortgage Inv Trust (SMT) 1,434.00p 1.59%

Entain (ENT) 586.20p 1.45%

ICG (ICG) 1,677.00p 1.45%

IG Group Holdings (IGG) 1,847.00p 1.15%

Convatec Group (CTEC) 213.20p 0.76%

Standard Chartered (STAN) 2,050.00p 0.74%

Tesco (TSCO) 463.00p 0.65%

FTSE 100 - Fallers

Babcock International Group (BAB) 911.20p -6.04%

Persimmon (PSN) 1,080.50p -2.66%

Barratt Redrow (BTRW) 283.10p -2.45%

British American Tobacco (BATS) 4,665.00p -2.35%

Fresnillo (FRES) 2,811.00p -1.92%

Smiths Group (SMIN) 2,522.00p -1.83%

British Land Company (BLND) 415.20p -1.61%

International Consolidated Airlines Group SA (CDI) (IAG) 475.20p -1.55%

Land Securities Group (LAND) 647.00p -1.52%

BAE Systems (BA.) 1,781.50p -1.49%

FTSE 250 - Risers

Bridgepoint Group (Reg S) (BPT) 263.00p 13.18%

Foresight Group Holdings Limited NPV (FSG) 441.50p 7.68%

Ceres Power Holdings (CWR) 470.00p 5.19%

Trustpilot Group (TRST) 252.40p 5.17%

Globaldata (DATA) 80.05p 3.71%

Aston Martin Lagonda Global Holdings (AML) 38.00p 2.70%

Plus500 Ltd (DI) (PLUS) 4,806.00p 2.60%

HGCapital Trust (HGT) 389.50p 2.50%

AO World (AO.) 92.00p 2.22%

Ocado Group (OCDO) 184.30p 2.16%

FTSE 250 - Fallers

AEP Plantations (AEP) 149.80p -4.51%

Vistry Group (VTY) 256.40p -3.83%

Endeavour Mining (EDV) 3,713.00p -3.71%

Breedon Group (BREE) 300.80p -2.97%

Hays (HAS) 32.80p -2.67%

Raspberry PI Holdings (RPI) 761.50p -2.65%

Bellway (BWY) 1,979.00p -2.32%

Genuit Group (GEN) 279.20p -2.31%

Taylor Wimpey (TW.) 81.94p -2.24%

Hammerson (HMSO) 365.60p -2.14%