European stocks closed higher on Monday as oil prices fell amid optimism for progress in stalled US-Iran peace talks this week.
In London, the FTSE 100 index ended up 79.88 points, or 0.8%, at 10,739.01. The FTSE 250 rose 285.95 points, 1.2%, to 24,491.37, but the AIM all-share fell 0.69 of a point, 0.1%, to 795.40.
Markets started the week on the front foot as “oil prices retreated and talks on trade and AI between the US and China made apparent progress”, said AJ Bell investment director Russ Mould.
“Comments from Donald Trump signalling he would ‘probably’ be open to meeting his Iranian counterpart at the UN General Assembly this week, and suggestions that shipments of oil and gas through the Strait of Hormuz are at a six-month high, helped pull oil down towards the 100 dollars per barrel mark.
“This is still more than 40% above pre-war levels and firmly in alarm bell territory in terms of the inflationary pressures it is unleashing, but at least the trajectory is more favourable,” Mr Mould added.
Brent oil was quoted at 100.28 dollars a barrel in London on Monday at the time of the equity market close, down from 104.37 dollars late on Friday.
The oil price fall came after the US president signalled he would be open to meeting Iranian President Masoud Pezeshkian, who will travel to New York for the UN General Assembly this week.
In European equities on Monday, the CAC 40 in Paris jumped 0.9%, and the DAX 40 in Frankfurt advanced 1.1%.
In Germany, investors brushed off fresh political difficulties for German Chancellor Friedrich Merz, whose centre-right CDU party suffered two regional election defeats at the hands of far-right and far-left parties.
JP Morgan’s Greg Fuzesi said the results raise pressure on Mr Merz, but he expects that the government will push on with its fiscal policy and with economic reforms.
In New York, the Dow Jones Industrial Average was up 0.5% at the time of the closing bell in London. The S&P 500 added 1.0%, and the Nasdaq Composite firmed 1.6%.
Also lifting the mood, US Treasury Secretary Scott Bessent touted a “very successful” meeting on trade and artificial intelligence with Chinese officials on Sunday, adding that both sides discussed greater communication on artificial intelligence threats.
“We just had a very successful engagement with the Chinese,” Mr Bessent told reporters after the all-day meeting with Vice Premier He Lifeng.
The discussions, which also included top US trade official Jamieson Greer, lasted around eight hours and set the stage for possible agreements on trade, AI and other issues before a summit of the countries’ top leaders.
Mr Trump and his Chinese counterpart Xi Jinping are due to meet on Thursday in Washington. Mr Bessent said the US proposed a notification mechanism between the two countries for incidents such as security threats.
The yield on the US 10-year Treasury was quoted at 4.97%, narrowed from 5.01%. The yield on the US 30-year Treasury was quoted at 5.30%, down from 5.34%.
The pound was quoted at 1.3372 dollars on Monday, unchanged from at the same time on Friday. Against the euro, sterling eased to 1.1658 euros from 1.1661 euros.
The euro firmed a touch to 1.1470 dollars from 1.1466 dollars. Against the yen, the dollar was trading at 157.46 yen, up from 157.07 yen.
On London’s FTSE 100, miners Metlen Energy & Metals and Antofagasta were prominent risers, up 7.6% and 3.2% respectively.
Engineer Spirax Group, trading platform IG Group and asset manager Aberdeen were also in the green, up 4.1%, 2.8% and 3.0% respectively.
In the red, Ithaca Energy, BP and Shell, down 4.1%, 2.8% and 1.4% amid the lower oil price.
Elsewhere, JD Sports ended up 0.4% after announcing a long-term franchise partnership with Grupo Axo SAPI to launch the JD brand in Mexico.
The Bury-based sports retailer said the entry into Mexico builds on its presence in the US and Canada and represents another “significant” step in its ‘JD brand first’ strategy.
JD Sports said the Mexican market offers a “significant runway” for growth, noting the country’s activewear market is valued at around 6.5 billion dollars and is expected to grow to more than 10 billion dollars by 2034.
On the FTSE 250, Ladbrokes owner Entain recouped the majority of its early losses to end down 1.2%, after receiving a vote of confidence from chief financial officer Michael Snape.
The finance chief had snapped up just under a quarter of a million worth of Entain stock on Friday.
Meanwhile, shares in Elixirr International plunged 20% as analysts questioned growth prospects despite a strong-looking first half.
The London-based consultancy said pre-tax profit rose 17% to £18.0 million in the six months ended June 30 from £15.4 million a year prior, with revenue up 25% to £89.0 million from £71.4 million.
But free cash flow fell to £1.8 million from £7.9 million, which Elixirr attributed to the impact of legacy debtor terms in acquired businesses and the timing of tax payments.
Broker Peel Hunt downgraded its rating on Elixirr to ‘reduce’ from ‘buy’ and slashed its share price target to 570p from 1,100p.
“With organic growth slowing and scale still modest relative to peers, we believe Elixirr’s roll-up model carries greater execution risk than the market has previously priced in,” the broker commented after the results.
Gold was quoted at 4,352.65 dollars an ounce on Monday, down from 4,355.67 dollars on Friday.
The biggest risers on the FTSE 100 were Metlen Energy & Metals, up 3.38p at 47.60p, Spirax Group, up 280.0p at 7,185.0p, Rolls Royce, up 54.8p at 1,504.8p, Marks & Spencer Group, up 12.8p at 368.1p and Polar Capital Technology Trust, up 21.0p at 681.0p.
The biggest fallers on the FTSE 100 were BP, down 15.8p at 542.9p, Glencore, down 14.6p at 542.2p, Fresnillo, down 50.0p at 2,985.0p, Shell, down 50.5p at 3,488.5p and Relx, down 19.0p at 2,480.0p.
Tuesday’s local corporate calendar has half-year results from do-it-yourself retailer Kingfisher and full-year results from engineering firm Smiths Group.
Tuesday’s global economic calendar has UK public sector net borrowing data and the Richmond Fed manufacturing index in the US. Financial markets are closed in Japan for a public holiday.
– Contributed by Alliance News
