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(Alliance News) - Stock prices in London continued to fall midday Monday, as investors were unable to shake off concerns surrounding the conflict in the Middle East, while developments in the US bond market added to the drama.
Stocks in New York were called to open lower, as the yield on the 10-year US government bond topped 5% for the first time since 2007.
The FTSE 100 index was down 45.56 points, 0.6%, at 7,356.58. The FTSE 250 was down 98.52 points, 0.6%, at 16,934.21, and the AIM All-Share was down 3.50 points, 0.5%, at 679.43.
The Cboe UK 100 was down 0.6% at 734.42, the Cboe UK 250 was down 0.7% at 14,674.20, and the Cboe Small Companies was down 0.3% at 12,782.98.
"Markets remain edgy amid the ongoing conflict in the Middle East," AJ Bell analyst Russ Mould commented.
"This followed a reverse in oil prices on reports Israel plans to delay its ground invasion of Gaza. Any sign of de-escalation would be received positively for humanitarian reasons but also by investors wary of the risks of the war in Gaza spreading to other parts of the region or bringing in other actors."
Oil prices weakened on the absence of a dramatic escalation in the Middle East over the weekend. Safe haven gold also returned recent progress.
Gold was quoted at USD1,977.76 an ounce on Monday afternoon in London, lower against USD1,996.01 at the equity market close Friday. Brent oil was quoted at USD91.85 at midday in London on Monday, down from USD93.20 late Friday.
Israel has delayed a ground invasion of Gaza and has allowed humanitarian aid into the enclave.
The war started when Hamas militants in the Gaza Strip stormed Israel on October 7, taking more than 200 hostages and killing at least 1,400 people, according to Israeli officials.
Israel has vowed to destroy Hamas, and says around 1,500 of the group's fighters were killed in clashes before its army regained control of the area initially under attack.
Israel has hit back with a relentless bombing campaign which has so far killed more than 4,600 Palestinians, mainly civilians, according to Gaza's health ministry. Officials said the central town of Deir al-Balah had been particularly badly hit overnight Saturday to Sunday.
Over the last two weeks, markets have reacted to the conflict by investing in safe-haven gold.
"News that Israel's ground assault on Gaza is being delayed while hostage negotiations continue saw gold and oil ease, but tensions continue to run high. Gold peaked near USD1,997 before the weekend and pulled back to about USD1,964 today before steadying," Bannockburn Global Forex analyst Marc Chandler commented.
Away from the Middle East, the yield on 10-year US government bonds rose above 5.0% for the first time since 2007 during the height of the subprime mortgage crisis.
The yield on the US 10-year Treasury spiked as high as 5.02% around 1040 BST on Monday, as investors worry the US Federal Reserve will need to keep interest rates higher for longer in the face of stubborn inflation and a resilient economy.
Around midday London time, it cooled to just a hair below the 5.00% threshold.
Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.6%, the S&P 500 index down 0.7%, and the Nasdaq Composite down 0.8%.
In European equities on Monday, the CAC 40 in Paris was down 0.4%, while the DAX 40 in Frankfurt was down 1.0%.
The pound was quoted at USD1.2150 at midday on Monday in London, lower compared to USD1.2156 at the equities close on Friday. The euro stood at USD1.0598, up slightly against USD1.0594. Against the yen, the dollar was trading at JPY149.97, up compared to JPY149.84.
In London's FTSE 250, Keller rose 14%.
The geotechnical engineering firm said "positive trading momentum" in the first half of 2023 continued
in the third quarter.
"Given our trading performance to date and the continued momentum in the business, we now expect full-year underlying operating profit to be materially ahead of current market expectations," Keller said.
According to the company-compiled consensus forecasts as of July 12, an underlying operating profit of GBP132 million is expected for 2023. This would be a 22% rise from the GBP108.6 million achieved in 2022.
Vistry lost 5.5%. The Kent-based housebuilder said it will cut up to 200 jobs and slim its number of regional units to 27 from 32 as part of this shift in strategy. The firm expects to deliver around GBP25 million of annualised cost savings as a result of the restructuring.
Looking forward, Vistry expects adjusted pretax profit in 2023 of GBP450 million, excluding the impact of transitioning the Housebuilding business to Partnerships, up from GBP418.4 million in adjusted profit in 2022.
Among London's small-caps, Tirupati Graphite shares surged 29%.
Tirupati hailed itself as "one of very few" graphite producers outside of China, after the country announced new export curbs on the substance last week.
China on Friday announced new curbs on exports of certain types of graphite, key to making batteries for electric vehicles, days after the US slapped fresh restrictions on outflows of high-tech microchips, AFP reported.
China was the world's leading graphite producer last year, accounting for an estimated 65% of total production, according to the US Geological Survey.
Tirupati said: "The company is one of very few current producers outside China, and one of only two quoted companies outside China that has brought globally significant new flake graphite production capacity into commercial production in the past decade, and at industry leading capital intensity levels.
On AIM, Mission Group plummeted 60%, following a profit warning. Barnstaple, England-based Mission calls itself a "collective of digital marketing and communications agencies".
Mission said that, since its interim results announcement in late September, "trading has become rapidly more challenging than previously anticipated".
On Monday, Mission said headline pretax profit will be no more than GBP3.1 million, compared to market expectations of GBP7.9 million. The expected outcome includes GBP1.2 million in costs relating to a business that is expected to be classified as discontinued at the end of the year, it noted.
"The board is extremely disappointed by the recent adverse change in current trading, and the outlook for the remainder of FY2023," Mission said.
Still to come on Monday's economic calendar, there is a eurozone flash consumer confidence indicator at 1500 BST.
It is a key week for the data and central banking calendar. There is UK unemployment data and a slew of flash purchasing managers' index readings due on Tuesday, an interest rate decision from the European Central Bank on Thursday before a US gross domestic product reading on the same day.
By Sophie Rose, Alliance News reporter
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