London stocks were mixed in early trading on Monday as investors weighed renewed tensions in the Middle East after fresh US military action against Iran over the weekend.
The FTSE 100 slipped 0.2% to 10,388.90, pressured by concerns that the latest escalation could complicate ongoing efforts to secure a broader peace agreement between Washington and Tehran.
Sentiment was dented after the US carried out what it described as “self-defence strikes” against Iranian radar installations and drone control facilities in Goruk and on Qeshm Island, following reports of continued security threats in the region.
Despite weakness among large-cap stocks, the more domestically focused FTSE 250 outperformed, rising 0.3% to 23,401.74 as investors continued to favour companies less exposed to global geopolitical risks.
Markets also reacted to comments from US President Donald Trump, who urged Americans to “just sit back and relax” following the military action, while insisting diplomatic efforts with Iran remained ongoing.
Oil prices edged higher as traders assessed the potential impact of the strikes on negotiations surrounding the reopening of the Strait of Hormuz, one of the world’s most important energy shipping routes. However, gains were limited by hopes that both sides remain committed to pursuing a longer-term ceasefire agreement.
