London open: FTSE steady as investors mull US-Iran peace roadmap, Starmer uncertainty

(Sharecast News) - London stocks were steady in early trade on Monday as investors weighed up news that the US and Iran have agreed on a roadmap to reach a peace deal against reports that Prime Minister Keir Starmer is on the brink of resigning.

At 0845 BST, the FTSE 100 was flat at 10,358.92, while sterling was down 0.2% against the dollar 1.3205 on news of Starmer's potential resignation.

Meanwhile, Brent crude was 1.6% lower at $79.27 a barrel after Qatar and Pakistan said the US and Iran have agreed on a roadmap to reach a final deal in 60 days. In a joint statement following talks between the two in Switzerland, the mediators said the US and Iran would continue technical talks throughout the week and establish a high-level committee to oversee the mediation process.

"Chief negotiators will report regularly to the High Level Committee and lead working groups focused on nuclear, sanctions, and a monitoring and dispute resolution group to ensure the effective implementation of the MoU, and on other matters," Qatar and Pakistan said in the statement.

They also said that negotiators from the US and Iran have agreed to establish a "de-confliction cell" for Lebanon to "ensure the adherence of the termination of military operations" there as per the memorandum of understanding.

"Technical talks will continue for the remainder of the week at the Burgenstock resort on all issues," Qatar and Pakistan said.

"The mediating parties will continue to do their utmost to ensure that the negotiations continue to be conducted in a constructive atmosphere with the aim of reaching a final deal."

Although oil prices were down, they were already coming off the lows hit immediately after news of the roadmap. Despite the progress, Tickmill Group's Patrick Munnelly was quick to point out that "the situation is not clean", noting that US President Donald Trump has also threatened renewed military action, Tehran has hinted at re-closing the Strait, and shipping activity remains difficult to read.

"The latest reports suggest traffic has slowed, and Iran may be considering a new oversight mechanism for the waterway, possibly including fees for shipping," he said. "That means the market is not pricing peace; it is pricing a lower probability of the worst-case scenario.

"The distinction matters. A 60-day roadmap is encouraging, especially with Oman and Pakistan reportedly helping create a committee to steer negotiations. But a roadmap is not a final deal, and the operational status of Hormuz remains murky."

Munnelly said that oil prices falling below $80 a barrel is a relief for inflation and central banks, "but the risk premium cannot disappear entirely while shipping flows, security arrangements and sanctions negotiations remain unresolved".

On home shores, reports over the weekend suggested that Starmer could resign as early as Monday and set out an orderly exit following Andy Burnham's Makerfield by-election win.

Chris Beauchamp, chief market analyst at IG, said: "It has been coming for months, but today might finally see Starmer give up the ghost on his less than stellar premiership. For markets, the question is what will really change. Does Burnham, who already has form on flip-flopping, have the strength of will to chart a more dynamic course than the drift exhibited by Starmer's period in office?

"Something big is needed to arrest the slide towards Reform, but markets are not likely to be happy with some kind of free-spending approach given the UK's dire financial state."

In equity markets, Babcock slumped as it backed its FY27 expectations and posted a rise in annual revenue but a dip in underlying operating profit as it took a �140m hit from a charge on the Type 31 contract with the Royal Navy.

Ocado was also under the cosh following a report the board is sounding out candidates to replace its co-founder CEO Tim Steiner following a weak share price performance. In a very brief statement, Ocado said its chief executive and the board "continually engage in long-term succession planning and regularly engage with potential candidates".

Budget airline easyJet flew higher after it rejected a third takeover proposal from private equity firm Castlelake at 625p per share. This followed previous proposals at 560p and 600p.