Trump slaps 30% tariffs on EU, Mexico
- FTSE 100 falls 21 points to 8,754
- Oil prices react after US bombs Iran nuclear sites
- Spectris (LON:SXS) jumps as Advent offer recommended, KKR highlights own offer
4.06pm: FTSE remains in the red, banks, insurers and retailers slip
The FTSE 100 is continuing to wallow in the red as the final half hour comes around.
Fallers are led by NatWest Group PLC (LSE:LON:NWG) and easyJet PLC (LSE:LON:EZJ), both down 2.5%, with the lender and the airline followed by several retailers, insurers and other banks.
Oil heavyweights Shell and BP (LON:BP) are both still in positive territory, up 0.2% and 0.6% respectively, though oil prices have retreated, with Brent down 1.5% at $76.11.
Gold miner Endeavour Mining PLC (LON:EDV) (LSE:EDV, (TSX:EDV), OTCQX:EDVMF) is topping the leaderboard, up 2.9%, followed by fellow precious metals miner Fresnillo PLC (LSE:LON:FRES), up 2.5%.
There are several utility companies also among the risers.
Bunzl PLC (LSE:LON:BNZL), which reports tomorrow, is up 2.4% as well.
3.20pm: Energy price warning
Voltaire said, "history never repeats itself; man always does" - this is the quote cited by oil and gas analyst Chris Wheaton at Stifel as he looks at the US’s strike against Iran’s nuclear programme.
Iran has "reached for its own weapon of last resort (at least for now)", he says, which is the threat of closure of the Strait of Hormuz.
"While we see a low probability of any closure being sustained beyond a few weeks, we also see commodity markets likely to price in tail-risk of serious disruption to energy markets - but this time, both oil and LNG."
While there are bypass pipeline routes that could offset some of crude oil flow if the Strait is blocked, the price required to balance oil markets given a complete loss of 5-7 millions of barrels a day, the analyst thinks, is $200 a barrel, "as the supply/demand deficit would be similar to that after the Russian invasion of Ukraine".
Wheaton says, like Goldman below, he is "much more worried about European gas prices than we are about oil prices", as circa 20% of global LNG production sits behind the Strait of Hormuz, with Europe only halfway through its seasonal gas storage refill.
"If LNG production from Qatar and the UAE was disrupted, we see a repeat of 2022: European gas prices rising so LNG flows to Europe and not Asian consumers to ensure storage is filled," which could mean European gas prices returning to 2.5 to 5x current prices.
"In a UK context, that would mean a UK Energy price cap of £3000-4500/yr., which would be economically and politically disastrous, in our view."
2.55pm: Wall Street U-turn
US stocks started lower but the three major indices have already climbed into positive territory.
The S&P 500 is up 0.3%, Dow Jones has gained 0.2% and the Nasdaq 0.1%.
Representing US smaller and mid-cap stocks, the Russell 2000 is down 0.5%, however.
Top risers on the S&P are financial sector names, Northern Trust (NASDAQ:NTRS) and Fiserv (NYSE:FI) are both prominent financial services companies, up 7.3% and 4.5% respectively.
Drug maker Eli Lilly (NYSE:LLY), cosmetics company Estee Lauder (NYSE:EL) and Tesla are next, all up over 3%.
2.25pm: Industrial strategy welcomed
Business leaders have welcomed the UK government’s new industrial strategy, which was announced today, and included
Shevaun Haviland, director general of the British Chambers of Commerce, said firms have "sounded the alarm about uncompetitive energy bills for years" and the launch of the strategy is "a welcome blueprint for policymakers and business" to create a "stable environment that enables faster, easier and more certain investment decisions".
She also welcomed the extra £1.2 billion each year for skills and the increased funding for the British Business Bank, as flagged by Rachel Reeves in the recent Spring Statement.
Haviland said much of what businesses had called for in meetings with policymakers in recent months "has been heard and reflected in this strategy. There’s more to do and we are ready to support the next steps."
Stephen Phipson, CEO of manufacturers’ organisation Make UK, also called it "a much-needed step forward" to tackle energy costs, skills shortages, and capital access.
He said his organisation has for many years highlighted three major challenges that were diminishing UK competitiveness, hampering growth and frustrating productivity gains: a skills crisis, crippling energy costs and, an inability to access capital for new British innovators.
"The strategy announced today sets out plans to address all three of these structural failings. Clearly there is much to do as we move towards implementation but, this will send a message across the country and around the world that Britain is back in business."
1.27pm: Goldman Iran oil forecasts
Goldman Sachs (NYSE:GS) says the rising oil price is the market pricing in "a somewhat higher probability of supply disruptions, with an estimated geopolitical risk premium of $12.
"While we still assume no significant disruptions to oil and natural gas supply, the downside risks to energy supply and the upside risk to our energy price forecasts have risen."
Goldman strategists considered two oil disruption scenarios: 1) a reduction in Iran supply only, where they estimate that Brent would rise to a peak of around $90 a barrel.
A broader disruption of regional oil production or shipping, with oil flows through the Strait of Hormuz dropping by 50% for one month and then were remaining down 10% for another 11 months, they estimate that Brent would briefly jump to a peak of around $110.
"While the events in the Middle East remain fluid, we think that the economic incentives, including for the US and China, to try to prevent a sustained and very large disruption of the Strait of Hormuz would be strong."
12.39pm: Markets heading lower
The FTSE 100 is heading lower and US futures are in the red too.
Both the London benchmark and the three major Wall Street indices are all down around 0.2%.
The US dollar has been on the rise, with the pound down 0.5% at $1.3375, with the DXY dollar index up 0.7%.
Brent crude is up 0.4% at $77.55 a barrel, while Reuters is reporting that three oil tankers have changed course today away from the Strait of Hormuz.
"US stock index futures gapped lower overnight as traders responded to the weekend news," sums up mnarket analyst David Morrison at Trade Nation. "President Trump wrongfooted everyone by authorising US involvement in Israeli-Iranian hostilities.
"US action has been limited so far to bombing sorties aimed at destroying Iran’s nuclear infrastructure. The strikes targeted key facilities in Fordo, Isfahan, and Natanz surprising many investors who had expected diplomatic talks to reconvene after President Trump indicated on Friday that he would make a decision within two weeks.
"The situation remains fluid. It’s currently unclear how successful the US mission has been, and it’s uncertain if the US action is set to continue. At the same time, there’s plenty of wild speculation over how Iran is likely to respond, assuming they are in a position to do so.
"Investors are taking an optimistic view."
But after the overnight gap lower in the S&P 500 towards 5,900, its lowest level since the beginning of this month, has been followed by some dip-buyers emerging, which sent all the US majors into positive territory earlier and now they are on the slide.
11.56am: Analyst views differ on Tesla ride-hailing
Over the weekend, the first fully autonomous Tesla Inc (NASDAQ:TSLA) ride-hail vehicles hummed onto the streets of Austin, Texas.
Analysts’ reaction has varied to this initial group of 20 ’geofenced’ vehicles, with safety monitors on board and invited customers only, to begin with.
Analyst Dan Ives at Wedbush – an unabashed Tesla bull – sees a "trillion-dollar" era beginning for Elon Musk’s company as he sees the service steadily growing to across roughly 25 US cities over the next year under a friendlier federal regulatory environment under the Trump administration.
This launch marks what Wedbush calls the “golden era” of Tesla’s autonomous ambitions, forecasting it could add around $1 trillion to Tesla’s valuation in the coming years and making it the most undervalued AI play in the market.
On the other side of the coin, UBS reckons that all the hype around a robotaxi empire is already baked into today’s US$322 share price and is sticking with its ’sell’ rating.
Crunching the numbers, even the Swiss bank’s best-case scenario sees some 2.3 million robotaxis by 2040, generating about US$200 billion in annual turnover, which the bank attributes to around $99 of value per share, far short of justifying the current multiple.
11.21am: Cheaper energy for some UK businesses
More than 7,000 UK companies will get energy prices cut by up to a quarter under the government’s industrial strategy, which involve investing £2 billion over four years.
Companies in "electricity-intensive" manufacturing sectors like automotive, aerospace and chemicals will get their costs reduced by up to £40 per megawatt hour from 2027 under the new British Industrial Competitiveness Scheme announced yesterday.
These businesses – exact details of which businesses will be eligible for the scheme will be determined following consultation – will be exempt from paying levies such as the renewables obligation scheme, feed-in tariffs and the capacity market.
Around 500 eligible businesses making steel, chemicals and glass will have increased support through an increased discount on electricity network charges, from the current 60% to 90% from 2026.
10.54am: Recruitment downturn forecast to last longer
Recruitment firms Hays (LON:HAYS) PLC (LSE:HAS) and PageGroup PLC (LSE:LON:PAGE) have been downgraded by UBS as the hiring market downturn is forecast to stretch even longer.
The current hiring downturn has been the longest in over 20yrs, "but amidst (re-)rising macroeconomic risks" analysts at the Swiss bank believe the recent Hays profit warning "may be a sign of further deterioration ahead".
"After circa 30 months of deteriorating markets, we had previously believed that signs of stabilisation earlier this year could mean an inflection point was ahead. Unfortunately, we now believe that the macroeconomic uncertainty is having a further impact on hiring intentions - Hays’ unscheduled update pointed to deteriorating job flow over Apr-Jun’25, and we’ve also noted signs of decelerating job listings/staffing market data (although equally, other markets are still showing signs of broad stabilisation so far)."
Likewise, for PageGroup, the analysts note that permanent hiring volumes are already at low levels, having broadly fallen for the past two and a half years, "but amidst rising macroeconomic uncertainty this year, cost pressures, and technological change we are concerned that declines could continue for a further period".
Following the Hays profit warning, forecasts for Page’s greater focus on permanent professional staffing profits are reduced 40-65% out to 2027, with dividend forecasts cut too.
10.28am: KKR ’won’t want to lose two bid battles in one day’
On the Spectris situation, where the shares are up 15.2%, analyst Russ Mould at AJ Bell (LON:AJBA) said: "KKR needs to get its skates on if it is serious about wanting to buy Spectris."
On the same day that KKR also had its separate bid rejected for Assura, he says the US firm "won’t want to lose a second takeover battle in the same day".
As well as noting that Advent’s deal is at a "chunky premium" to the market value before bid interest was revealed earlier this month and that Spectris’ board has recommended shareholders accept the all-cash offer from Advent, he says KKR "will need to make a formal offer fast if it stands a chance of derailing the Advent bid".
10.05am: Markets only midly risk-off
Equity markets are in a "mild risk-off mood this morning", says market analyst Neil Wilson at Saxo, "not quite the big knee-jerk move that might have happened had the strikes been announced when markets were open – time has allowed for selling to be more orderly."
He wonders whether the US strike on Iran adds to or reduces the threat of escalation.
"Does it get us closer to a resolution or make things worse? It’s clearly got near-term implications for oil prices with the Strait of Hormuz in focus, but wider implications are less hard to pin down – geopolitics is always discounted pretty quickly unless there is a direct read through from events to particular assets."
In the case of oil, which earlier hit a five-month high, "we could see further spikes" but "need to see what Tehran does next".
"Could it close the Strait of Hormuz? Possibly, but the US Navy would probably have a lot to say about this. It could hit tankers and create a de facto closure though and that could see oil trade higher for longer. But I guess the calculation is that Iran can’t do much and this strikes forces a resolution quicker.
"US president Trump somewhat contradicted the official line by talking about “regime change”, which adds a layer of complexity to this discussion. Is this a surgical, one-off strike or just the start of something more terrible?"
Overall, says Wilson, "the [financial market’s] reaction to this slide into chaos remains muted."
9.12am: FTSE moves into green
The FTSE 100 has clambered into positive territory, and it’s not just BP and Shell doing the work.
Topping the London blue-chip leaderboard are medical devices maker ConvaTec Group PLC (LSE:LON:CTEC), up 2.3%; distributor Bunzl PLC (LSE:BNZL), up 1.6%; housebuilder Berkeley Group Holdings PLC (LON:BKGH) (LSE:BKG), up 1.4%; and caterer Compass Group PLC (LSE:LON:CPG), up 1.3%.
Intercontinental Hotels Group PLC (LSE:NYSE:IHG (LON:IHG)), Halma PLC (LSE:LON:HLMA) and WPP PLC (LSE:LON:WPP) follow.
Not a group of companies that screams the market is worried about the situation around Iran.
Across in continental Europe, Germany’s DAX and France’s CAC are both just below flat, while Spain’s IBEX is just above.
8.57am: Spectris bid battle emerging?
Following the Spectris saying it has agreed to be taken over by Advent, another US private equity group has put out a statement pointing out that it also made a proposed offer on 2 June and has since been "engaging constructively" with the board.
KKR says it has not made a revised proposal but "confirms that it is actively engaged in the advanced stages of due diligence and arranging financing commitments" and "strongly encourages shareholders to take no action with regards to the Advent offer".
Shares in FTSE 250-listed Spectris are up 15% at 3,774p.
Advent’s offer, as a reminder, was 3,763p. And shareholders are also getting the 2024 dividend of 56.6p announced back in February and to be paid this Friday.
8.36am: Oil response to US bombing
Oil prices shot higher earlier, momentarily topping $81 in the early part of the Asia session, which was the highest since January.
But Brent crude has eased to $77.6 a barrel, only just above where it was at the end of last week.
The price of gold is little moved, while the US dollar index is up 0.3% at just over 99 and US Treasury bonds are being sold, sending yields up slightly.
"So overall a pretty muted response from markets so far," said strategists at Deutsche Bank (ETR:DBKGn).
"In terms of what this all means for markets going forward, its really all about whether the Iranian regime weaponises oil, and in particular whether they seek to close the Strait of Hormuz where over 20% of the world’s oil flows daily."
In terms of the economic impact, the impact on Europe would be potentially more serious than for the US, he says, with every $10/bbl increase in oil having the potential to add a quarter of a percent to consumer price inflation within a quarter and if sustained 0.4pp within a year. "Growth could be lowered by around 0.25pp if such an increase was sustained."
Aside from closing the Strait of Hormuz, Reid says Iran could also target other energy infrastructure in the Middle East or strike US assets, "which could then lead to further escalation, including if Israel or US were to target Iran’s oil export facilities".
He notes that Iranian comments have so far been "ambiguous" on the nature of any retaliation, with Iran’s President saying the US "must receive response for their aggression" and its UN envoy speaking of a "proportionate response".
US officials yesterday mostly sought to portray the strikes as one-off aimed at ending Iran’s nuclear programme, with Secretary of State Marco Rubio saying that the US was ready to meet with Iran.
However, last night Trump alluded to the possibility of regime change, posting: "It’s not politically correct to use the term, ’Regime Change,’ but if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn’t there be a Regime change???"
8.15am: FTSE 100 drops slightly
The FTSE 100 tumbled over 30 points at the open but has already seen this trimmed to a deficit of 13 points at 8,761.4.
Airlines are leading the fallers, with easyJet PLC (LSE:EZJ) and British Airways owner International Consolidated Airlines Group (LON:ICAG) SA (LSE:IAG) both down over 2%. BA is among airlines to have cancelled Dubai flights after US dropped bombs on Iran.
On the rise are oil giants BP PLC (LSE:NYSE:BP.) and Shell PLC (LSE:LON:SHEL, NYSE:SHEL), up 1.3% and 0.7%.
7.52am: Spectris agrees to Advent bid
Another FTSE 250 deal has been agreed, but this one will see instrumentation and controls engineer Spectris PLC (LSE:SXS) taken private for £3.8 billion by US private equity group Advent.
Essentially, this firms up a conditional proposal made two weeks ago for a cash offer of 3,763p per share, which compares to the last closing price before the bid of 2,038p.
Spectris chairman Mark Williamson said: "The board remains confident in Spectris’ strategy and the opportunities that will be delivered over the medium term, but believes that Advent’s offer recognises the attractiveness of Spectris and represents strong and immediate cash value for shareholders at an attractive premium of 84.6 % to the undisturbed share price."
7.38am: PHP and Assura agree merger
Assura Group (LON:AGRP) (LSE:AGR) has agreed to a takeover by Primary Health Properties PLC (LSE:LON:PHP, OTC:PHPRF), which has raised its offer to £1.79 billion to edge out a rival bid by private equity groups KKR and Stonepeak.
Under the terms of the increased offer, Assura shareholders will receive 0.3865 new PHP shares and 12.5p in cash for each Assura share. They will also be entitled to a special dividend of 0.84p per share and together will own around 48% of the enlarged group.
Based on PHP’s closing share price of 103.5 pence on 20 June 2025, the offer implies a total value of 53.3 pence per Assura share, or 55.0 pence when including previously declared dividends.
This represents a 5.8% premium to the competing all-cash private equity offer of 50.42p per share and reflects a 47% premium to Assura’s share price in mid-February, the day before the offer period began.
7.24am: World holds breath to see Iran reaction
The world is "holding its breath to see how Iran will respond" after the US bombing of Iran’s nuclear facilities over the weekend, says market analyst Ipek Ozkardeskaya at Swissquote Bank.
Iran said that "all options" are on the table, she notes, including trade disruptions through the Strait of Hormuz, where 20% of global oil and gas flows transit.
"This could involve blocking the canal or attacking commercial ships, as the Houthis do. Another option could be striking nearby oil facilities – similar to the 2019 attack on Saudi Abqaiq that knocked out 7% of global oil supply.
"But many remain optimistic that Iran will avoid a full-blown retaliation and regional chaos, to prevent its own oil facilities from becoming targets and to avoid a widening conflict that could hurt China – its biggest oil customer.
"So some think – and trade the idea – that the threat of disruption to oil trade will not materialize," says Ozkardeskaya, noting that satellite images are reported to suggest that oil continues to still flow through the Strait.
7.15am: FTSE called lower as market reacts to US bombing of Iran
The FTSE 100 is expected to beat a retreat at the start of the week, as the market reacts to the US involvement in the Israel-Iran conflict over the weekend, with ’bunker buster’ bombs dropped on nuclear facilities.
A 39-point decline has been called for the London index on the futures market for Monday’s early trading, after the benchmark dropped 17 points to finish at 8,774.65 at the end of last week, with a total loss of almost 76 points over the five days.
Wall Street had a mixed finish at the end of the week and Asian markets this mornign are also mixed, with Japan’s and India’s benchmarks down 0.2% and 0.7%, while Chinese stock are higher, with the Hang Seng up 0.6% and the Shanghai Composite rising 0.5%.
Oil prices ticked up earlier but are dropping back already. Brent crude topped $79 a barrel, the highest since January, but is back to $78.3.
Announcements accepted on Monday 23 June
Finals: One Health Group, SDCL Efficiency Income Trust
Economic announcements: Existing Home Sales (US)