The FTSE 100 was broadly flat on Monday as traders awaited the first major decisions from Andy Burnham as he takes up his new role in Number 10.
The incoming Prime Minister has set out his stall over the past week, but there has been little firm guidance on policy or on who he will appoint to key government positions.
London’s leading was quite happy bouncing around the 10,500 mark on Monday – a channel that has been held since April and one that doesn’t seem likely to break without a major change in the macro environment.
“Investors are keenly awaiting details of who will form Andy Burnham’s cabinet once he becomes UK prime minister today,” said Russ Mould, investment director at AJ Bell.
“Shabana Mahmood is the favourite to become chancellor and so far, bond markets seem to prefer her as the likely candidate rather than Ed Miliband. Gilt yields eased back last week on speculation that Mahmood would get the job, which is the biggest clue that markets are accepting the governmental change in a calm manner.
“That’s good for now, but it’s what comes next that really matters. Bond investors are looking for any clues on public spending intentions, how they will be funded, and any policies that deviate from the path pursued under the Starmer-Reeves regime. Burnham’s big speech later today might offer a glimpse at what he wants to achieve but is unlikely to give the full picture.”
With the market in a wait-and-see mode, there was little in the way of big moves by FTSE 100 stocks on Monday.
Apart from Computecenter jumping 4.5% and Metlen Energy and Mining falling 2.5%, all FTSE 100 stocks moved less than 2% on Monday.
Housebuilders were among the fallers, and traders continue to weigh the risk of interest rate hikes following another weekend of escalating military action in the Middle East that sent oil prices higher.
“Brent crude has set off on a hot streak, trading around $90 a barrel as military action has intensified between the US and Iran,” said Susannah Streeter, chief investment strategist, Wealth Club.
“That’s an increase of 30% from lows seen earlier in the month. Already the latest attacks have expanded beyond military targets, with bridges, utilities, and port facilities coming under attack, and the countdown is on to an even wider escalation, given that President Trump has vowed to increase attacks on Iranian infrastructure on Wednesday.”
IAG fell 1.5% with Ryanair, which released a disappointing update, sending shares sharply lower.
Technology-oriented shares were among the best performers after a good session for Us stocks on Friday. Polar Capital Technology Trust was among the gainers as investors bought back into the AI-focused trust.