The FTSE 100 edged lower on Monday despite stronger European and US markets, as a sharp sell-off in AstraZeneca overshadowed improving investor sentiment driven by easing Middle East tensions and a retreat in oil prices.
The blue-chip index closed 10.35 points lower (-0.1%) at 10,857.70, while the FTSE 250 climbed 1.0% to 24,224.77 and the AIM All-Share gained 0.8% to 768.61.
AstraZeneca, the index’s second-largest constituent, slumped 9% after reports it had held merger discussions with US pharmaceutical giant Bristol-Myers Squibb over a potential US$400 billion deal. Investors questioned the strategic rationale, with analysts suggesting the move could signal uncertainty over AstraZeneca’s long-term growth pipeline.
Broader market sentiment improved after Brent crude fell to around US$83.90 a barrel, following comments from US President Donald Trump indicating he was delaying further military action against Iran in favour of renewed diplomatic efforts. The decline in oil prices eased inflation concerns and supported expectations for lower bond yields.
Lower yields helped rate-sensitive sectors, with UK housebuilders among the strongest performers. Barratt Redrow rose 3.8%, Persimmon added 2.2%, and Vistry jumped 8.0%.
On the FTSE 250, shipping services group Clarkson surged 9% after upgrading full-year guidance, citing exceptional first-half trading driven by disruption to global shipping routes through the Strait of Hormuz.
In the US, markets traded firmly higher, with the Dow Jones up 1.0%, the S&P 500 gaining 1.1%, and the Nasdaq advancing 1.8% as lower energy prices boosted risk appetite.
Investors now turn their attention to Tuesday’s earnings from BP, HSBC and Smith & Nephew, alongside US trade and labour market data.
