London open: FTSE falls amid escalating US-Iran tensions

(Sharecast News) - London stocks fell in early trade on Thursday amid escalating tensions between the US and Iran following further strikes.

At 0840 BST, the FTSE 100 was down 0.5% at 10,439.88, while Brent crude was 0.6% lower at $77.53 a barrel - having briefly breached $80 overnight - and West Texas Intermediate was down 0.4% at $73.20.

US Central Command said in a statement that it had struck around 90 Iranian military targets including air defence systems, coastal surveillance assets, missile and drone storage sites, naval capabilities, and military logistics infrastructure along Iran's coastline.

This followed strikes on approximately 80 Iranian military targets on Tuesday, including more than 60 Islamic Revolutionary Guard Corps small boats, "to impose heavy costs for Iran violating the ceasefire by attacking three commercial vessels navigating the Strait of Hormuz".

In response, the Islamic Revolutionary Guard Corps said it had carried out co-ordinated missile and drone strikes against US military bases in Kuwait and Bahrain, and threatened further attacks should the US resume its attacks.

However, Trump also seemed to imply that talks would continue. Despite initially insisting the negotiations were a "waste of time", he later said Iran's leaders had "called a little while ago. They want to make a deal so badly." Trump was speaking to reporters on Air Force One his way back to the US from Turkey.

Susannah Streeter, chief investment strategist at Wealth Club, said: ''The shock at the resumption of attacks in the Middle East has started to ease off, but investors are skittish, with early gains evaporating on the FTSE 100. The blue-chip index initially clawed back some ground in early trade before sentiment turned wary again.

"Investors are assessing the likely outcome of the latest round of military action, with both Iran and the US hitting targets in the region. While President Trump has declared the ceasefire to be over, he's already been heard talking on Air Force One about the prospect of a deal and whether he's inclined to talk to Iran. It already seems that a door may be opening to fresh negotiations, even though both sides continue to talk tough. Oil prices have retreated slightly, with Brent crude hovering around $77 a barrel, down from above $80 yesterday."

On home shores, a survey showed house prices remained subdued in June as the cost of living and wider geopolitical tensions weighed on sentiment.

The latest residential market survey from the Royal Institution of Chartered Surveyors showed house prices largely unchanged month-on-month, with a negative balance of -33. The balance was -34 in April and -35 in May.

New buyer enquiries improved on May's -34 but remained in negative territory at -29. Newly-agreed sales stood at -32.

Looking ahead, and near-term price expectations were also subdued. However, at -32 they were less markedly negative than May's -44, and longer-term, the 12-month expectations balance ticked up two points to 8.

Near-term sales expectations also improved, at -16, well above March's recent low of -34.

Tarrant Parsons, head of market research and analysis at Rics, said: "June's survey result offers some cautious encouragement that the worst of the slowdown in market activity may be beginning to pass.

"That said, any nascent improvement remains fragile, and is now being tested by renewed political uncertainty on the domestic front.

"While the Bank of England left interest rates unchanged, uncertainty around the outlook for inflation and borrowing costs continues to weigh on sentiment. Until there is greater clarity over both the political backdrop and the path of interest rates, house market activity is likely to remain relatively subdued."

In equity markets, AstraZeneca tumbled as it said a trial for a treatment for a rare type of heart disease had failed to meet its primary objective.

On the upside, Computacenter surged as it boosted full-year guidance on the back of strong second-quarter trading, including bumper demand from hyperscalers.

Gambling software maker Playtech was also sharply higher after saying it expects annual earnings to be "significantly" above estimates after a strong performance in the first six months of the year.

Bytes Technology gained after saying it traded well in the first four months of the year, delivering double-digit year-on-year growth in gross invoiced income and gross profit across both the private and public sectors.

Miners were on the front foot, with Antofagasta, Anglo American, Glencore and Fresnillo among the top risers on the FTSE 100.

Streeter said: "Mining stocks have rebounded, with gold and silver producers benefiting as easing oil prices have taken some of the edge off inflation worries and helped push the dollar lower. A cheaper greenback makes commodities priced in the currency, such as precious metals, more attractive to international buyers."

Market Movers

FTSE 100 (UKX) 10,439.88 -0.47%

FTSE 250 (MCX) 23,136.67 0.52%

techMARK (TASX) 5,861.80 -0.27%

FTSE 100 - Risers

Computacenter (CCC) 4,536.00p 11.12%

Flutter Entertainment (DI) (FLTR) 8,350.00p 5.03%

Antofagasta (ANTO) 3,655.00p 3.63%

Anglo American (AAL) 3,484.00p 3.16%

Standard Chartered (STAN) 2,092.00p 2.65%

Glencore (GLEN) 503.70p 2.48%

Fresnillo (FRES) 2,626.00p 2.30%

Entain (ENT) 531.00p 2.19%

Rolls-Royce Holdings (RR.) 1,427.20p 2.09%

Burberry Group (BRBY) 1,067.50p 1.95%

FTSE 100 - Fallers

AstraZeneca (AZN) 12,992.00p -8.38%

British American Tobacco (BATS) 4,502.00p -2.60%

BP (BP.) 484.15p -1.41%

Coca-Cola Europacific Partners (DI) (CCEP) 7,880.00p -1.38%

Unilever (ULVR) 4,576.50p -1.19%

Smith & Nephew (SN.) 1,112.00p -1.15%

Diageo (DGE) 1,493.50p -0.86%

Shell (SHEL) 3,054.00p -0.81%

Imperial Brands (IMB) 2,737.00p -0.80%

Reckitt Benckiser Group (RKT) 5,020.00p -0.75%

FTSE 250 - Risers

Playtech (PTEC) 376.20p 17.49%

Ninety One (N91) 219.00p 4.36%

Bytes Technology Group (BYIT) 407.00p 4.01%

W.A.G Payment Solutions (EWG) 108.40p 3.83%

Hochschild Mining (HOC) 452.20p 3.55%

Pan African Resources (PAF) 94.60p 3.16%

Softcat (SCT) 1,888.00p 3.16%

Elementis (ELM) 154.60p 2.93%

Close Brothers Group (CBG) 402.00p 2.81%

Aston Martin Lagonda Global Holdings (AML) 37.28p 2.64%

FTSE 250 - Fallers

Utilico Emerging Markets Ltd (DI) (UEM) 280.00p -2.78%

Sirius Real Estate Ltd. (SRE) 93.95p -2.24%

RHI Magnesita N.V. (DI) (RHIM) 2,630.00p -2.05%

Cordiant Digital Infrastructure Limited NPV (CORD) 122.50p -2.00%

AO World (AO.) 92.80p -1.80%

Vietnam Enterprise Investments (DI) (VEIL) 770.00p -1.53%

Mondi (MNDI) 681.80p -1.50%

Zigup (ZIG) 458.00p -1.40%

Schroder Asian Total Return Investment Company (ATR) 680.00p -1.31%

Neuberger Private Equity Partners Limited (NBPE) 1,468.00p -1.21%