The FTSE 100 was slightly lower on Tuesday after talks between the US and Iran faltered amid reports that each side had launched attacks against the other.
Concerns about higher oil prices weighed, and London’s markets didn’t enjoy the AI-related boost that Asia and the US did on Monday. The FTSE 100 fell 0.2% in mid-morning trade despite S&P 500 futures pointing to a 0.3% gain on the open.
“It’s Groundhog Day for the markets as the Iran-US ceasefire is tested, while conflicting noises are made about the prospects for a peace deal,” said Dan Coatsworth, head of markets at AJ Bell.
“Understandably, markets are in a non-committal mood as they wait to see if this is the week when we finally see some form of resolution to the crisis. The FTSE 100 slipped 0.3%, while oil prices ticked higher but remain some way off the $100 per barrel alarm-bell territory.”
Most stocks were trading in the red at the time of writing, but losses were contained. Babcock and BAE Systems were the top fallers, both down between 2%- 2.5%.
Sage was the FTSE 100’s top riser, jumping off a level of support around 840p. Entain and JD Sports were also among the best performers.
FTSE 100 housebuilders were mixed after Nationwide released its latest house price index, revealing that UK property prices fell 0.6% month-on-month in May.
“Global turmoil is taking a toll on the property market. House prices fell between April and May and are up just 1.7% in a year. It’s a valuable reminder that property investments aren’t always safe as houses,” said Sarah Coles, head of personal finance at AJ Bell.
“The Nationwide House Price Index only provides a partial picture of the market, but it’s particularly timely, because it looks at prices at the point of mortgage approvals – months ahead of the completion data we get from the Office for National Statistics.
“We can see the market is starting to struggle in the face of some tough headwinds. Falling consumer confidence, rising unemployment, higher mortgage rates and fears of rising prices are denting buyer enthusiasm. The fact there are fewer buyers around is encouraging people to negotiate hard, so average prices are falling.”
Persimmon fell 0.3%, and Barratt Redrow added 0.5%. Housebuilders have fallen so far since Israel and the US attacked Iran that there’s a strong argument that the bad news about house prices has already been priced in.