The FTSE 100 closed lower on Monday as investors focused on escalating tensions in the Middle East. The move came after the US and Iran exchanged messages over the weekend concerning a draft agreement to extend the ceasefire and reopen the Strait of Hormuz. Sentiment was further pressured by reports that Israel had expanded its ground operations in Lebanon, undermining an earlier truce.
Mining stocks were among the worst performers, with Fresnillo and Endeavour Mining each losing nearly 3%. Defence contractors also weakened: BAE Systems fell more than 2%, Babcock dropped 1.8% and Rolls-Royce slid 1.7%. By contrast, oil majors benefited from the geopolitical backdrop, with Shell up 1.1% and BP rising 0.8%.
EasyJet rallied more than 10% after addressing media reports of takeover interest from Castlelake, clarifying that it had not received any formal approach. In the housing market, Nationwide reported that UK house prices fell 0.6% in May, the sharpest monthly decline since June 2025.
