London open: FTSE steady amid inflation concerns as oil prices rise

(Sharecast News) - London stocks were steady in early trade on Monday amid worries about inflation as oil prices rose after Trump warned Iran that time for peace talks was running out.

At 0835 BST, The FTSE 100 was flat at 10,197.35, shaking off opening losses. Meanwhile, Brent crude was up 1% at $110.33 a barrel and West Texas Intermediate was 1.3% higher at $106.81 after Trump warned on Truth Social over the weekend that "the clock is ticking" for Iran and "they better get moving, fast, or there won't be anything left of them".

He added: "Time is of the essence."

There were also reports over the weekend that the US and Israel are preparing to resume joint attacks on Iran as soon as this week. According to the New York Times, citing two Middle East officials, the US and Israel are engaged in "intense preparations" for a potential resumption of hostilities. They were reported to have said these were the most significant preparations since the ceasefire brokered by Pakistan in April was established.

Oil prices were also boosted after a drone strike caused a fire near the UAE's Barakah nuclear plant over the weekend.

Patrick Munnelly at Tickmill Group said Trump's warning to Iran "has reinforced concerns that the conflict could move back toward a more active military phase, delaying any normalisation of traffic through the Strait of Hormuz".

On home shores, former health secretary Wes Streeting confirmed he would run for prime minister if a leadership contest is triggered. Investors were also reacting to news that Greater Manchester mayor Andy Burnham has been cleared to stand in the upcoming Makerfield by-election in a bid to become an MP and challenge Keir Starmer.

Looking to reassure markets, Burnham said in an interview over the weekend that he supports the current fiscal rules as well as a plan to get debt down.

Kathleen Brooks, research director at XTB, said: "Burnham stated clearly that he now supports fiscal rules and agreed that the UK needs a plan to reduce its debt burden. The markets might be sceptical of Burnham, however, his comments tell us two things: 1, the bond market holds significant sway over UK politicians, and 2, if he does manage to replace Starmer, and it is a big if, he could commit to keeping Rachel Reeves in place, and UK fiscal policy may not differ too much from what we already have."

In equity markets, housebuilders were among the fallers amid worries about the impact of higher rates, with Barratt Redrow, Persimmon, Berkeley and Vistry all lower.

Miners Glencore and Anglo American were in the red after data showed China's economy faltered in April, with both retail sales and industrial production significantly undershooting forecasts.

Anglo American was also in focus after agreeing to sell its portfolio of steelmaking coal mines in Australia to private UK mining company Dhilmar for up to $3.9bn in cash.

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