FTSE 100 LIVE: Stocks fall as investors await Iran’s response to US strikes

Shares in electric vehicle company Tesla (TSLA) surged more than 10%, as investors reacted to the rollout of its much-anticipated robotaxi service in Austin, Texas on Sunday.

In a note, published late on Sunday, Wedbush analyst and Tesla bull Dan Ives wrote: “We took two approximately 15 minute rides around Austin and the key takeaways are that it was a comfortable, safe, and personalised experience.”

He said: “The Robotaxis we experienced today were foundational, and there is a path for the future where these Robotaxis may also have Grok integration, interior customisation, and a much more user-centric focus as there’s no longer a need to focus on the driver experience.”

Oil prices gave up some gains on Monday afternoon, having spiked in early morning trading.

Brent crude futures (BZ=F) were up 0.4% to $77.31 a barrel, at the time of writing, while West Texas Intermediate (CL=F) rose at $73.99 a barrel.

In a post on his social media platform on Monday, US president Donald Trump said: “EVERYONE, KEEP OIL PRICES DOWN. I’M WATCHING! YOU’RE PLAYING RIGHT INTO THE HANDS OF THE ENEMY. DON’T DO IT!”

In a separate post, just a few minutes later, Trump said: “To The Department of Energy: DRILL, BABY, DRILL!!! And I mean NOW!!!”

The major US indices had a more muted start to trading on Monday, with futures having wobbled in pre-market open earlier in the day.

The Dow Jones Industrial Average (^DJI) hovered around the flatline, while the blue-chip S&P 500 (^GSPC) edged 0.2% and the tech-heavy Nasdaq (^IXIC) rose 0.1%.

Read more on Yahoo Finance

Christine Lagarde, president of the European Central Bank (ECB), said in a speech on Monday afternoon that with “with the foundations of global balance under strain, the international financial system is also entering uncharted territory”.

Speaking at a hearing of the committee on Economic and Monetary Affairs of the European Parliament, she said that Eurosystem staff expect the euro area economy to grow by 0.9% this year, 1.1% in 2026 and 1.3% in 2027.

Lagarde said that there were “several factors that are keeping the economy resilient and that should support growth over the medium term”.

However, she added: “Risks to the growth outlook remain tilted to the downside, however. In particular, growth could slow in the event of a further escalation in global trade tensions and the associated uncertainties, deteriorating financial market sentiment and continued geopolitical tensions.

“That being said, a swift resolution to trade and geopolitical tensions or a further increase in defence and infrastructure spending could spur activity by more than expected.”

Goldman Sachs (GS) has warned that oil prices could surge even higher if there were a significant disruption to shipment flows through the Strait of Hormuz.

“If oil flows through the Strait of Hormuz were to drop by 50% for one month and then were to remain down 10% for another 11 months, we estimate that Brent would briefly jump to a peak of around $110,” analysts from the investment bank said.

At the same time, Reuters reported that they said “we think that the economic incentives, including for the U.S. and China, to try to prevent a sustained and very large disruption of the Strait of Hormuz would be strong.”

Shares in FTSE 250-listed (^FTMC) industrial group Spectris (SXS.L) surged 15% on Monday, after the company said it had agreed to a £3.8bn takeover offer.

The company said it had reached an agreement with private equity group Advent International, which would see Spectris shareholders receive £37.63 per share in cash.

AJ Bell (AJB.L) investment director Russ Mould said: “KKR needs to get its skates on if it serious about wanting to buy Spectris. Having been beaten by Primary Health Properties (PHP.L) in the race to buy Assura (AGR.L), KKR won’t want to lose a second takeover battle in the same day.”

“Advent has struck a deal to buy Spectris at a chunky premium to the market value before bid interest was revealed earlier this month. Spectris’ board has recommended the all-cash offer and it’s now up to shareholders to vote on it. KKR has already expressed interest in Spectris and will need to make a formal offer fast if it stands a chance of derailing the Advent bid.

He added: “The fact we’ve got two bid battles in Spectris and Assura just goes to show how the UK stock market continues to be on sale. If investors don’t recognise the good value opportunities on offer, trade buyers or private equity firms will keep swooping on targets and pick them off one by one.”

Oil prices fluctuated on Monday, initially spiking in early trading and then falling into the red, before hovering around the flatline.

Brent crude futures (BZ=F) edged 0.1% higher to $77.09 a barrel, at the time of writing, while West Texas Intermediate (CL=F) held steady at $73.81 a barrel.

The fluctuations in oil prices come as investors assess the potential impact of an escalation in the Iran-Israel conflict on supply, with concerns about disruption to shipments through the Strait of Hormuz.

Neil Shearing, group chief economist at Capital Economics, said: “This carries around 20% of global oil production and 20% of liquified natural gas trade and so is a critical choke point. In response to the US attacks over the weekend, Iran’s parliament voted to close the Strait, although a final decision rests with the country’s security chiefs.”

He said that “prediction markets think it is now more likely than not that the Strait of Hormuz will be closed at some point this year.”

“However, the moves in the oil market do not yet represent a significant threat to the global economy. While oil prices have risen by around $8pb (per barrel) since the start of the conflict, they still remain below the level this time last year,” Shearing added. “This is due in large part to an expansion of supply from OPEC+. If sustained, we estimate that the increase in oil prices so far would add only 0.1-0.2 percentage point to inflation in advanced economies. This is unlikely to have a significant bearing on central bank policy decisions.”

Yahoo Finance UK’s Lucy Harley-McKeown writes:

“Airline stocks headed into the red on Monday as the conflict in the Middle East ramps up, with the US bombing Iran over the weekend to support Israel in its bid to cripple the country’s nuclear programme.

Following the news, British airways owner International Airlines Group (IAG.L) said it would pause flights to Dubai and Doha. Singapore Airlines has also cancelled flights in the region. The stock was down around 1.3% at the open in London.

Airlines stocks are selling across the board, with Lufthansa (LHA.DE) down 5.1% in early trade and Air France (AF.PA) declining 1.9%.

There has been no industry-wide response to the conflict just yet but cancellations so far may point to companies strategically wanting to get their planes out of Middle Eastern airspace to avoid them getting stuck there for an undetermined period, according to analysis on Bloomberg TV this morning.”

Read more on Yahoo Finance UK

Yahoo Finance UK’s Pedro Goncalves writes:

“Gold prices dipped in early European trading as safe haven buyers moved into the dollar following US airstrikes on Iranian nuclear facilities, a sharp escalation in the Middle East that rattled global markets.

Gold futures (GC=F) were down 0.5% at $3,369.70 an ounce at the time of writing, while the spot gold price fell 0.3% to $3,357.03 per ounce.

The pullback in bullion came largely as a result of dollar strength. The US dollar index (DX-Y.NYB), which tracks the greenback against a basket of six currencies, rose 0.3% to 99.03.

Rising fears of Iranian retaliation helped push oil prices higher, stoking concerns that renewed energy shocks could fuel inflation and prolong the current high interest rate environment. The dollar gained on the back of these expectations, building on modest gains made last week after the Federal Reserve maintained a cautious stance on rate cuts.”

Read more on Yahoo Finance UK

British healthcare property investor Assura (AGR.L) said on Monday that its board had agreed to a £1.79bn takeover offer from Primary Health Properties (PHP.L).

PHP had laid down a £1.68bn bid last month but was outbid by a rival suitor, with a consortium led by US private equity firm KKR valuing the business at £1.7bn.

However, in an announcement on Monday Assura said that its directors believed the terms of PHP’s increased offer were in the “best interests” of the company.

Shares in Assura were up less than 1% following the announcement, while PHP stock slipped more than 3%.

AJ Bell investment director Russ Mould said: “Several Assura shareholders had already expressed a desire to back PHP’s previous bid because it meant they could continue to get investment exposure to Assura’s assets.

“PHP is listed on the London Stock Exchange and is offering a mixture of cash and shares. KKR’s offer is all in cash, meaning Assura investors would be denied any future upside from the underlying assets. It’s unusual to see two competing parties fight this long, but it now looks like PHP has won the battle.”

Data released on Monday showed that UK private sector activity has grown this month, helped by strength in the services sector.

The S&P Global flash UK composite purchasing managers’ index (PMI) reported a reading of 50.7 in June, up from 50.3 in May.

Alex Karr, UK economist at Capital Economics, said: “Although June’s composite PMI is consistent with GDP flatlining in Q2, the Bank of England will be reassured that the recent cooling in the labour market finally appears to be weighing on services prices. That said. the risk is that the recent surge in energy prices eventually feeds though into higher prices.”

“Despite the rise in the composite PMI … it is still below its level in March, prior to the rise in business taxes and Trump’s Liberation Day tariffs.”

Electric vehicle maker Tesla (TSLA) began to rollout its long-awaited robotaxi service in Austin, Texas on Sunday, with shares in the company rising 1.6% in pre-market trading on Monday.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Tesla just entered a bold new chapter, launching its first paid Robotaxi rides in Texas over the weekend. While the debut was modest – limited to invited guests, a relatively small region, and with safety crew on board – it marks a critical real-world test of Tesla’s vision-only approach to autonomous driving.

“It’s not the fully unchained future Elon Musk has promised just yet, but make no mistake, this is a pivotal first step to realising that dream. When you’re one of the most heavily scrutinised companies on the planet, slow and steady wins the race, and by most counts, yesterday was a very successful soft launch.”

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said:

“There is a tense mood on financial markets as investors assess the potential repercussions of the US attack on Iran. Investors had breathed a sigh of relief on Friday as it appeared a two-week window had opened when a diplomatic solution could be pursued, so the weekend’s military action has knocked sentiment.

“The FTSE 100 (^FTSE) has opened in the red and European stocks are set for a weak start as a risk-off attitude percolates, and in the US … S&P 500 futures (ES=F) indicate a subdued session ahead.”

US stock futures were mixed on Monday morning, as US president Donald Trump’s decision to enter the US into the Israel-Iran conflict threw a fresh bout of uncertainty into a market rushing to grapple with the aftereffects.

Futures tied to the S&P 500 (ES=F) edged 0.1% higher, while Nasdaq futures (NQ=F) were up 0.2%, but Dow Jones Industrial Average futures (YM=F) were little changed.

Read more on Yahoo Finance

Hello from London. Vicky McKeever here, bringing you the latest business and market news throughout the day.

European stocks have opened lower this morning after the US launched strikes on Iran nuclear sites over the weekend, marking the latest escalation of the conflict in the Middle East.