Market open and movers
British stocks started the trading day under pressure after an incident in the Gulf region reignited geopolitical tensions. At 03:13 ET (07:13 GMT), the FTSE 100 was down 0.4%, reversing the prior weeks 0.7% gain. The pound slipped 0.04% to 1.3512 against the U.S. dollar. Major continental indices were also weaker, with Germanys DAX off 1.1% and Frances CAC 40 down 1%.
Geopolitical developments
Investor risk appetite dimmed after comments posted on Truth Social by former U.S. President Donald Trump stating that Iran had violated the ceasefire. The post said Washington could escalate military action if Tehran rejects a proposed deal and indicated that the U.S. had already "taken custody" of the seized vessel. It also warned the United States might target significant Iranian infrastructure should tensions intensify.
Iranian officials signalled the possibility of retaliation, with military authorities saying the seizure would be treated as a breach of the ceasefire. State media reported that Tehran might not attend upcoming negotiations in Islamabad unless the U.S. lifted its naval blockade, highlighting unresolved differences over sanctions, uranium stockpiles and control of the strategic waterway.
Energy and inflation implications
Oil prices rebounded sharply as market participants reacted to the renewed prospect of shipping disruptions through the Strait of Hormuz. The rise in crude helped to sap broader equity momentum and reintroduced concerns about inflationary pressure tied to energy market volatility.
UK corporate updates
M&C Saatchi reported a 26.1% decline in like-for-like operating profit for 2025 and said it would forgo a final dividend in favour of share buybacks. The agency warned that the Middle East conflict is expected to hit its sport and entertainment business significantly in 2026, adding to a backdrop of weaker consumer conditions and geopolitical uncertainty.
Online trading group Plus500 posted its strongest quarterly showing in over five years, driven by accelerated U.S. growth, a rise in customer numbers and solid profitability despite ongoing trading headwinds.
Luxury goods group Mulberry delivered a notable FY26 turnaround, reporting 5.7% annual growth. Management attributed the improvement to a pronounced second-half rebound that spanned all regions and sales channels.
Outlook
Markets opened the week reflecting a more cautious stance as geopolitical friction and an associated oil rebound combined with mixed corporate news to weigh on risk assets. The situation remains fluid given the public statements from both sides and the potential for further disruption to shipping and negotiations in the region.