Market Overview
British equities edged lower on Monday, with the FTSE 100 trading down 0.1% after earlier gains, lagging European peers – Germany's DAX rose 1.6% and France's CAC 40 added 1.2%. The pound weakened 0.4% to $1.3433 against the US dollar.
UK Manufacturing PMI
The S&P Global UK Manufacturing PMI slipped to 51.9 in July, marking a four‑month low and a decline from June’s 52.5. Despite the headline dip, output, new orders and employment all increased, with production growth reaching a near two‑year high. The overall fall was driven by a sharp reduction in purchase stocks, slower jobs growth and easing supplier delivery times. The index has remained above the neutral 50.0 threshold for nine consecutive months. Rob Dobson, director at S&P Global Market Intelligence, noted that developments in the Middle East would continue to be "key to supply and price developments in the coming weeks."
Oil and Geopolitical Developments
Crude oil prices fell sharply, extending the previous session’s decline. Brent crude dropped 5.06% to $83.48 a barrel, while WTI fell 6% to $79.59. The price slide followed a Truth Social post by US President Donald Trump announcing the cancellation of a planned military strike on Iran, contingent on the "immediate, complete and total" opening of the Strait of Hormuz and an end to Tehran’s nuclear programme. Trump confirmed later that talks through intermediaries had begun.
Qatar’s mediators submitted a revised draft to Iran on Saturday aimed at restoring Hormuz traffic, and Iranian diplomats responded positively, according to the Wall Street Journal. Iran’s demand to levy transit fees on vessels using the waterway remains unresolved, and a tanker reported an explosion near the strait on Sunday. US CENTCOM confirmed its naval blockade remained active, with 35 commercial vessels redirected, two disabled and two boarded.
Gulf allies remain divided: Saudi Arabia continues to advocate de‑escalation, while the UAE urges Washington to apply decisive military force, arguing the IRGC will not concede without direct pressure. An Iranian diplomat warned the IRGC was deliberating pre‑emptive strikes regardless of US restraint.
Precious Metals
Gold futures were at $4,091.16, down 0.4%, and spot gold traded at $4,035.92, down 0.2%.
Company‑Specific Moves
AstraZeneca shares fell nearly 7% (reported as an 8.79% decline) after the Financial Times reported the drugmaker had held merger talks with Bristol Myers Squibb, though the discussions may not result in a deal.
Housebuilding stocks gained as falling UK gilt yields lifted rate‑sensitive shares, with Vistry, Bellway and Persimmon climbing between 3.1% and 6.1%.
Clarkson plc jumped more than 13% after the shipping services company said it expects full‑year results to be materially ahead of market expectations, following a record first half.
easyJet plc extended Castlelake’s deadline to decide on a firm takeover offer to August 7, matching Apollo’s timetable as the bidding process enters a decisive phase. The airline continues to provide due‑diligence access to both bidders after backing Apollo’s £5.7 billion proposal over Castlelake’s earlier £5.5 billion offer.