LONDON MARKET MIDDAY: FTSE pares gains as Iran tensions weigh

Mon, 11th May 2026 12:08

(Alliance News) - Stock prices in London gave up early gains to trade little changed by midday Monday, as the lack of progress in negotiations between Iran and the US kept investors cautious.

The FTSE 100 index was up 4.51 points, marginally higher, at 10,237.58. The FTSE 250 was down 74.28 points, 0.3%, at 22,775.10, and the AIM all-share was up 2.64 points, 0.3%, at 817.10.

The Cboe UK 100 was up 0.1% at 1,018.66, the Cboe UK 250 was down 0.2% at 19,770.58, and the Cboe small companies was up 0.6% at 18,401.03.

In European equities on Monday, the CAC 40 in Paris was down 0.9%, while the DAX 40 in Frankfurt was down 0.2%.

On the domestic political front, Prime Minister Keir Starmer vowed to prove his "doubters" wrong as he sought to head off speculation of a leadership challenge following Labour's heavy losses in Thursday's elections.

Starmer acknowledged the setbacks, saying the results "hurt" and adding: "I get it, I feel it, and I take responsibility." He said that "like every government, we've made mistakes… but we got the big political choices right."

The prime minister also pledged to bring forward new legislation to nationalise British Steel, saying a commercial sale of its Scunthorpe steel works had not been possible since the government took over running the plant last year.

Further, Starmer pledged to go further in his "reset" in relations with the EU, saying his government would be defined by putting Britain at the "heart of Europe".

In currency markets, the pound was quoted at USD1.3594 midday Monday, down from USD1.3623 on Friday. Against the euro, sterling slipped to EUR1.1548 from EUR1.1568 a day earlier.

The euro stood at USD1.1772, little changed from USD1.1773, while the dollar traded at JPY157.11, up compared with JPY156.63.

Iran's foreign ministry described its response to a US proposal to end the war as "reasonable" and "generous", with state media reporting that it included recognition of Iranian sovereignty over the Strait of Hormuz. US President Donald Trump had earlier labelled the terms "totally unacceptable."

Trump also spoke with Israeli Prime Minister Benjamin Netanyahu, according to a source and an Israeli official. In an interview with CBS's 60 Minutes, Netanyahu said there was "work to be done" in Iran and acknowledged that the country retained many of the capabilities it had before the war began.

Oil prices rose as fears of further escalation resurfaced. Brent crude was quoted at USD103.79 a barrel at midday in London, up from USD101.49 late Friday, as investors worried that the vital Strait of Hormuz could remain closed for longer.

Back in London, Airtel Africa jumped 12%, leading the FTSE 100.

Compass Group rose 2.9% after lifting its full-year profit guidance following what it described as a "strong first-half performance".

The Surrey-based contract caterer said pretax profit in the six months to March 31 increased 15% to USD1.47 billion from USD1.28 billion a year earlier. Revenue rose 11% to USD24.98 billion from USD22.57 billion.

Underlying operating profit climbed 12% to USD1.84 billion from USD1.65 billion.

Chief Executive Dominic Blakemore said: "We've delivered a strong first-half performance, with underlying operating profit up 12%, enabling us to increase our full-year profit guidance. We have great momentum across the business, driven by excellent new business wins, high levels of client retention and margin progression in both regions."

He added that recent wins were up 14% to USD4.1 billion, led by the Business & Industry segment, which delivered double-digit growth across a diverse client base. Compass also highlighted growth across emerging areas, including the AI ecosystem.

Compass raised its interim dividend by 13% to 25.5 cents per share from 22.6 cents and now expects underlying operating profit growth of "above 11%" for the full year, up from previous guidance of "around 10%".

The company said this will be driven by organic revenue growth of around 7%, around 2% profit growth from mergers and acquisitions, and ongoing margin progression. It reiterated confidence in sustaining mid-to-high single-digit organic revenue growth over the longer term.

On the FTSE 250, Aston Martin was the worst performer, down 4.0%, while Shawbrook Group was among the gainers, up 2.6%.

Among smaller caps, Asos surged 14% after agreeing to sell its Lichfield fulfilment centre to Marks & Spencer for GBP66 million as part of efforts to simplify operations and strengthen its balance sheet.

The online fashion retailer said the disposal will generate annual savings of GBP6 million and is expected to result in a one-off pretax profit of GBP85 million after adjustments. Proceeds will support financial flexibility following recent refinancing and debt repayment activity.

Across the Atlantic, stocks in New York were called mixed. The Dow Jones Industrial Average was called marginally higher, the S&P 500 down 0.1%, and the Nasdaq Composite also down 0.1%.

Investors await US existing home sales data at 1500 BST, with consensus expecting April sales of 4.05 million compared with 3.98 million in March.

The yield on the US 10-year Treasury was quoted at 4.39%, widening from 4.37%. The yield on the US 30-year Treasury stood at 4.97%, widening from 4.94%.

In Asia, Beijing signalled it is seeking "more stability" in relations with Washington, confirming that Donald Trump will visit China this week - the first such trip by a US president since 2017.

China's foreign ministry said Trump's visit will take place from Wednesday to Friday. Top trade negotiators from both sides are set to meet in Seoul ahead of Trump's summit with President Xi Jinping to discuss trade and economic issues.

The White House had announced the trip several weeks ago, but it was postponed earlier this year as Trump focused on the US-Israel war with Iran.

"Top-level diplomacy plays an irreplaceable strategic guiding role in China-US relations," Chinese foreign ministry spokesman Guo Jiakun said.

Gold was quoted at USD4,661.96 an ounce, down from USD4,711.50 on Friday.

Still to come on Monday's economic calendar are US existing home sales figures.

By Eva Castanedo, Alliance News reporter

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