The FTSE 100 declined by more than 0.5% on Monday after reports that Iran would suspend talks with the US, eroding hopes for a ceasefire extension and underscoring escalating tensions following Israel’s broadened operations in Lebanon. Defence stocks led the market lower, with BAE Systems down 5%, Babcock off 4.5% and Rolls-Royce dropping 5.5%. Major banking and pharmaceutical names also retreated, adding further pressure on the index.
In contrast, oil heavyweights outperformed as crude prices rose, with Shell gaining 2.7% and BP up 3.1%. EasyJet jumped more than 7.5% after addressing media speculation about takeover interest from Castlelake, clarifying that it had not received any formal approach or proposal. Entain advanced over 5% amid reports that a takeover bid may be in preparation for its US joint-venture partner.
On the economic data front, Nationwide reported that UK house prices fell 0.6% in May, the sharpest monthly drop since June 2025 and a larger decline than economists had forecast.
