Market Overview

On Monday 3 August 2026, the FTSE 100 index recovered from earlier losses to finish up 0.26 % at 07:35 ET (11:35 GMT). The move occurred despite a weaker‑than‑expected headline UK manufacturing PMI and a steep fall in oil prices. European peers outperformed, with Germany’s DAX gaining 1.5 % and France’s CAC 40 adding 1.3 %. Sterling was largely unchanged, slipping 0.16 % to $1.3460 against the US dollar.

UK Manufacturing PMI

The S&P Global UK Manufacturing PMI slipped to 51.9 in July, a four‑month low and down from 52.5 in June. The index has remained above the neutral 50.0 mark for nine consecutive months. While the headline dip was driven by a sharp reduction in purchase stocks, slower jobs growth and easing supplier delivery times, underlying components showed strength: output, new orders and employment all rose, with production growth reaching a near two‑year high. 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 Energy Prices

Crude oil prices fell sharply after a Truth Social post by U.S. President Donald Trump announced 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 were beginning. Brent crude dropped 5.06 % to $83.48 a barrel, while U.S. WTI fell 6 % to $79.59. The decline was reinforced by a revised draft mediation proposal from Qatar to Iran, which Iran reportedly received positively, though Iran’s demand for transit fees on vessels using the strait remains unresolved. U.S. CENTCOM confirmed its naval blockade stayed active, redirecting 35 commercial vessels, disabling two and boarding two others. Gulf allies were split: Saudi Arabia advocated de‑escalation, the UAE urged decisive military force, and an Iranian diplomat warned the IRGC was considering pre‑emptive strikes regardless of U.S. restraint.

Precious Metals

Gold futures were quoted at $4,106.47, down 0.01 %, while spot gold rose 0.19 % to $4,050.50.

Equity Movers

  • AstraZeneca plc shares fell nearly 7 % after the Financial Times reported the drugmaker was in merger talks with Bristol Myers Squibb, though the discussions may not result in a deal.
  • Housebuilding stocks benefited from lower UK gilt yields: Vistry Group plc, Bellway plc and Persimmon plc climbed between 3.1 % and 6.1 %.
  • Clarkson plc surged 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 8 August, matching Apollo’s timetable. 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.

Bond Market

The broader market found support from the sharp decline in oil prices, which eased inflation concerns and pushed UK government bond yields lower, further aiding rate‑sensitive shares.