London pre-open: Stocks to fall amid renewed US-Iran tensions

(Sharecast News) - London stocks were set to fall at the open on Tuesday following fresh strikes between the US and Iran, as traders returned to their desks after the Bank Holiday weekend.

The FTSE 100 was called to open around 30 points lower. At 0725 BST, Brent crude was up 1% at $91.35 a barrel and West Texas Intermediate was 1.1% higher at $86.75 after the US and Iran exchanged fresh strikes for the first time since July over the weekend.

On home shores, meanwhile, figures showed that shop price inflation hit a two-year high in August amid higher energy prices.

The BRC-NIQ shop price index showed that shop price inflation rose to 1.5% year-on-year last month, following growth of 0.9% in July. This was above the three-month average of 1.2%.

Food inflation increased to 2.8% following 2.2% growth in July, while non-food inflation rose to 0.9% in August, following 0.2% growth the month before.

Fresh food inflation fell to 3% in August from 3.1% in July, while ambient food inflation increased to 2.5% from 1.1%.

Helen Dickinson, chief executive of the British Retail Consortium, said: "Shop price inflation rose to its highest level in over two years, albeit well below the headline consumer price index. The impact of higher energy, input and commodity costs is beginning to filter through into prices, particularly for ambient foods which are typically imported and processed. In non-food, electrical prices rose amid the ongoing AI boom, which is forcing up the price of memory chips and storage. Meanwhile, retailers kept clothing prices low to offer value for families getting ready for the new school year.

"The months ahead look challenging for households, with rising bills putting further pressure on budgets. Retailers are facing persistently high operating costs, limiting their ability to absorb further increases without impacting investment, jobs and prices. If the Government is serious about supporting growth while keeping the cost of living in check, it must address the cost of doing business, including by tackling the growing burden of business rates, packaging and employment taxes."

In corporate news, private equity firm Veritas Capital said it has agreed to buy Bodycote in a £1.65bn deal.

Under the terms of the acquisition, Veritas - through its special purpose vehicle Vulcan Alpha Bidco - will pay 940p per share for Bodycote. This comprises 932.8p in cash and the FY26 interim dividend of 7.2p per share.

The price represents a 44% premium to the closing Bodycote share price on 7 July, which was the last business day before Veritas submitted its initial proposal.

Bodycote chair Daniel Dayan said: "The Bodycote board believes that this offer from Veritas reflects the high quality of Bodycote's business and management, and delivers shareholders excellent value in cash. The Bodycote team has worked extremely hard over many years to build a leading position in our industry, including recent success in delivering on the Optimise, Perform and Grow initiatives; accordingly the board wishes to express its thanks to management and employees on behalf of shareholders.

"It is gratifying to see Veritas' strong support in this announcement for Bodycote's strategy in focusing the group on its most attractive markets for the benefit of all stakeholders. Veritas is an experienced and knowledgeable owner of industrial businesses with the capability to accelerate the delivery of this strategy. The board remains highly confident in Bodycote's prospects and believes that this offer recognises that value today and is therefore recommending it to shareholders."

Elsewhere, drugmaker AstraZeneca said it has finalised its exclusive agreement with Dizal Pharmaceutical for worldwide rights to develop and commercialise Zegfrovy, an oral EGFR inhibitor already approved in the US and China.

It also reported highlevel results from its Sanovo Phase III trial, showing that Tagrisso plus Orpathys delivered a statistically significant and "highly clinically meaningful" improvement in progressionfree survival.