The FTSE 100 closed 38.59 points lower, down 0.4% at 10,862.50 on Monday as rising oil prices and fading hopes of progress in US-Iran negotiations weighed on sentiment.
Brent crude climbed to $86.35 a barrel, from $83.40 on Friday, after Iran’s Revolutionary Guards said the Strait of Hormuz would remain closed unless Washington met a series of demands.
The FTSE 250 fell 0.4% to 24,744.54, while the AIM All-Share bucked the trend, edging 0.1% higher to 796.38.
Higher oil prices supported BP, up 1.4%, and Shell, up 0.6%. Miners also performed well, with Fresnillo and Glencore among the FTSE 100’s strongest performers.
Tobacco stocks were hit hard, with Imperial Brands down 4.6% and British American Tobacco falling 4.4%. Housebuilders also weakened as bond yields rose, while Vistry plunged 12% following reports that credit insurer Allianz Trade plans to reduce cover provided to its suppliers.
Sterling strengthened to $1.3522, while US markets traded mixed as investors turned their attention to Wednesday’s key US inflation report.
Looking ahead to Tuesday, investors will watch the Reserve Bank of Australia’s interest-rate decision and Japanese trade data. In London, InterContinental Hotels Group reports half-year results, while Bellway provides a trading update.
