London close: Stocks finish lower amid Middle East jitters
By Josh White
Date: Monday 23 Jun 2025
(Sharecast News) - London stocks ended slightly lower on Monday following a day of choppy trading, as investors took a cautious stance ahead of Iran's expected response to weekend US strikes on its nuclear facilities.
The FTSE 100 index dipped 0.19% to close at 8,758.04 points, while the FTSE 250 fell 0.13% to 21,120.95 points.
In currency markets, sterling was last up 0.29% on the dollar to trade at $1.3490, while it gained 0.13% against the euro, changing hands at €1.1696.
"The markets are not yet reacting with any degree of panic to the US airstrike on Iran's nuclear facilities as they await to see how Tehran responds," said Russ Mould, investment director at AJ Bell.
"The promised two-week hiatus as the US weighed its decision didn't materialise as the Trump administration acted on Saturday.
"After briefly spiking above $80 per barrel when the market opened in Asia on Monday, Brent pared those gains to trade modestly higher."
Mould said that if Iran decided to block the Strait of Hormuz, through which a large proportion of the world's oil and liquefied natural gas passes, then energy prices could move "substantially" higher.
"That could hurt consumers and businesses around the world as it would push up the cost of energy, transport and raw materials.
"The double-digit energy price gains seen since Israel's first missile strike on Iran 10 days ago will have already had some inflationary impact."
Economic sentiment muted as UK recovery falters, trade tensions linger
In economic news, the UK economy showed modest improvement in June, with a slight uptick in private sector activity led by services, according to fresh provisional data.
The S&P Global flash UK composite purchasing managers' index (PMI) rose to 50.7 from May's 50.3, remaining just above the threshold indicating growth.
Services strengthened to a three-month high of 51.3, while manufacturing, though still in contraction, improved to a five-month high of 47.7.
New business volumes returned to growth for the first time in six months, and inflationary pressures eased.
However, manufacturers continued to report falling export demand, amid the drag from global trade frictions and heightened geopolitical uncertainty.
"The UK economy remained in a sluggish state at the end of the second quarter," said Chris Williamson, chief business economist at S&P Global Market Intelligence.
"Although business conditions have continued to improve, quelling recession fears, growth of business activity remains disappointingly lacklustre, indicative of second quarter GDP rising at only 0.1% quarterly pace."
However, Williamson added there had been a "marked" cooling in inflationary pressures, especially in the service sector.
Persistent inflation in the sector had long been a concern of the Bank of England's rate-setting Monetary Policy Committee.
"As such, the picture of near-stalled growth, falling employment and lower inflation opens the door for the BoE to cut rates again at its next policy meeting in August," Williamson said.
Consumer confidence in the UK meanwhile declined slightly, with S&P's sentiment index slipping to a two-month low of 45.
Weakening job security and concerns over inflation's impact on purchasing power contributed to the decline, alongside rising household debt levels.
"As the middle of the year approaches, pessimism among UK households shows no signs of improving, with consumer sentiment remaining firmly in negative territory," said S&P Global economist Maryam Baluch.
"Concerns about making ends meet have intensified due to high prices and job insecurity ... which will limit willingness to spend and instead encourage greater financial caution, dampening economic growth."
Elsewhere, geopolitical developments dominated global economic commentary.
The head of the International Monetary Fund, Kristalina Georgieva, warned that rising tensions in the Middle East could undermine global growth.
The warning followed US airstrikes on Iranian nuclear sites over the weekend, prompting fears Iran could retaliate by closing the Strait of Hormuz, a key global oil artery.
Oil prices jumped in response, and markets remained on edge ahead of Iran's next move.
The IMF had already downgraded its global growth outlook to 1.8% this year, largely due to trade restrictions introduced by US president Donald Trump.
Across the eurozone, private sector growth held steady in June, with the composite PMI unchanged at 50.2.
Services returned to neutral territory at 50.0, while manufacturing remained weak.
Germany posted a modest rebound in output, while activity in France continued to decline, weighing on the overall regional performance.
In the US, private sector activity grew for a 29th consecutive month, though the pace slowed slightly.
The flash composite PMI slipped to 52.8 from 53.0, with services easing and manufacturing steady.
Rising input and output prices, particularly in manufacturing, were widely attributed to recent tariff increases.
Despite weaker exports, firms reported building inventories in anticipation of further trade disruptions.
Elsewhere, US existing home sales rose 0.8% in May to an annualised 4.03 million, reversing April's decline and beating forecasts.
Regional variations persisted, with strong gains in the Northeast offsetting declines in the West.
London stocks mixed as Spectris surges on takeover, oil and utilities advance
On London's equity markets, Spectris soared 15.5% after the instrumentation specialist agreed to a £3.8bn takeover offer from private equity firm Advent.
Rival suitor KKR, which had earlier expressed interest, said it remained in active talks with the company and was conducting advanced due diligence.
Oil majors BP and Shell rose 1.2% and 0.7% respectively, supported by a slight uptick in energy prices.
Brent crude was last up 0.06% at $77.06 per barrel.
ConvaTec gained 2.4% after JPMorgan Cazenove added the medical products firm to its 'positive catalyst watch' ahead of interim results.
Berkeley Group rose 1.7%, despite Berenberg cutting its price target to 5,000p from 5,500p.
The broker maintained a 'buy' rating, citing only modest adjustments to future earnings forecasts.
Utilities also advanced, with National Grid up 2.7%, Severn Trent 1.9%, SSE 1.5% and Centrica 1.0%, as defensive sectors found favour amid geopolitical uncertainty.
Bunzl added 2.1% ahead of a scheduled trading update on Tuesday.
On the downside, airlines retreated as rising oil prices revived fuel cost concerns.
Low cost carrier easyJet dropped 2.5% and British Airways owner IAG slipped 1.4%.
Assura eased 0.2%, after backing an improved £1.79bn takeover bid from Primary Health Properties.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,758.04 -0.19%
FTSE 250 (MCX) 21,120.95 -0.13%
techMARK (TASX) 5,024.55 0.13%
FTSE 100 - Risers
National Grid (NG.) 1,077.00p 2.67%
Fresnillo (FRES) 1,443.00p 2.56%
Convatec Group (CTEC) 289.80p 2.40%
Bunzl (BNZL) 2,320.00p 2.11%
Severn Trent (SVT) 2,738.00p 1.86%
Berkeley Group Holdings (The) (BKG) 3,876.00p 1.73%
Experian (EXPN) 3,828.00p 1.59%
United Utilities Group (UU.) 1,141.50p 1.56%
Intertek Group (ITRK) 4,718.00p 1.55%
SSE (SSE) 1,834.00p 1.47%
FTSE 100 - Fallers
Smurfit Westrock (DI) (SWR) 3,080.00p -3.90%
NATWEST GROUP (NWG) 494.30p -2.43%
Mondi (MNDI) 1,170.00p -2.42%
easyJet (EZJ) 506.60p -2.39%
Marks & Spencer Group (MKS) 354.00p -2.18%
Associated British Foods (ABF) 2,033.00p -2.12%
Ashtead Group (AHT) 4,330.00p -1.99%
Admiral Group (ADM) 3,364.00p -1.92%
Pearson (PSON) 1,060.50p -1.81%
Diageo (DGE) 1,848.50p -1.73%
FTSE 250 - Risers
Spectris (SXS) 3,798.00p 15.72%
Playtech (PTEC) 352.00p 4.76%
NextEnergy Solar Fund Limited Red (NESF) 74.20p 3.20%
Endeavour Mining (EDV) 2,356.00p 3.06%
JTC (JTC) 821.00p 3.01%
W.A.G Payment Solutions (WPS) 83.60p 2.96%
Crest Nicholson Holdings (CRST) 188.60p 2.61%
Moonpig Group (MOON) 259.50p 2.57%
SDCL Efficiency Income Trust (SEIT) 52.50p 2.54%
Telecom Plus (TEP) 2,075.00p 2.47%
FTSE 250 - Fallers
Softcat (SCT) 1,775.00p -5.99%
Trainline (TRN) 271.40p -5.01%
Hays (HAS) 63.15p -4.40%
Primary Health Properties (PHP) 99.20p -4.15%
Indivior (INDV) 1,009.00p -3.63%
Frasers Group (FRAS) 665.00p -3.56%
Aston Martin Lagonda Global Holdings (AML) 81.25p -3.50%
Raspberry PI Holdings (RPI) 443.20p -3.36%
NCC Group (NCC) 141.60p -3.28%
Carnival (CCL) 1,540.50p -3.08%
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