Source: Sharecast
The FTSE 100 was called to open around 20 points lower.
Deutsche Bank’s Jim Reid said: "Whether June continues the positivity of May will surely depend on whether the hopes of a US-Iran deal turn into reality. It's been 93 days now since the strikes began and 54 since the truce that later became a ceasefire started. We've never felt closer to a deal but potentially never felt closer to it all falling apart with isolated strikes becoming more frequent including some again over the weekend. It's hard to imagine remaining in limbo for much longer given that if the Strait of Hormuz remains closed into mid-summer it will at some point likely lead to a non-linear tipping point of economic stress.
"For now, it seems Mr Trump is still deciding on whether the current negotiations between the two nations satisfy his demands. He has been surprisingly quiet over the weekend which indicates things perhaps coming close to a head. Meanwhile Israel and Hezbollah are trading attacks again which complicates matters even if fresh ceasefire proposals are being worked on. We could have said this a week ago, but it really feels like the next few hours and days will be critical."
On home shores, investors will be mulling industry data showing that house prices fell for the first time this year in May, as weakening consumer sentiment and rising costs weighed on the market.
According to the latest Nationwide house price index, annual growth slowed to 1.7% from 3% in April, while month-on-month, prices fell 0.6%. In April, house prices rose 0.4%.
Analysts had been expecting prices to soften in May but by a more modest 0.1%.
In corporate news, easyJet said it was not in talks with Castlelake after the US investment firm announced late on Friday that it was in the early stages of considering a possible offer for the budget airline.
"The board of easyJet has not had any discussions with, nor received any approach or proposal from Castlelake," it said. "The board is clear in its duty of aiming to maximise shareholder value and will consider any proposal, should one be made. In any assessment, the board will be especially mindful of its valuation and deliverability."
The statement came after Castlelake said late on Friday that it was considering a bid, sending US shares of easyJet soaring.
EasyJet noted the "highly opportunistic" timing, pointing to the fact that its share price is "temporarily depressed" due to the current situation in the Middle East and its impact on customer confidence and jet fuel prices.
The company also noted the "considerable" regulatory, financial and other execution challenges associated with a potential takeover of easyJet.
Renewable energy business Drax said it has agreed to acquire Bluefield Solar Income Fund in a cash deal worth about £548m.
Drax said the acquisition would materially expand its renewables business by adding BSIF's roughly 0.9GW portfolio and development pipeline, boosting underlying earnings from clean energy and improving cash‑flow visibility.
Instant-service equipment company ME International warned annual profits would be lower as the Iran war hit revenues at its photo-booth and laundry businesses in the first half of the fiscal year.
Group revenue in the six months to 30 April grew 2%, but the photobooth business was impacted by reduced demand for official photo ID amid ongoing travel uncertainty.
ME now expects FY 2026 profit before tax to be in the range of £69m to £74m, compared with £78.2m a year earlier.