Source: Sharecast
The FTSE 100 closed up 0.4% at 10,854.32. Meanwhile, Brent crude was down 2% at $92.50 a barrel and West Texas Intermediate was 2.3% lower at $85.09 as US Treasury Secretary Scott Bessent prepared to outline the toughest sanctions in history against Iran.
The sanctions were due to be announced at 1800 BST.
Susannah Streeter, chief investment strategist at Wealth Club, said: "The US is changing tactics in its battle against Iran, and its fight to get oil flowing more freely from the region. Sanctions are the latest weapon of choice and the arsenal is set to be unveiled at a press conference later.
"Using the invective the administration has become infamous for, Treasury Secretary Scott Bessent stated in an interview that ‘economic D-Day is coming for Iran’. The emphasis is expected to be on isolating Iran economically and targeting its trading partners, with oil exports and the financial channels supporting Tehran likely to be central to the measures. But quite how effective this will be, given China is Iran’s biggest customer for oil, is far from clear. The reaction on oil markets has been muted, with Brent crude dropping slightly but still trading around $93 a barrel.
"There may be some relief that the threats have moved from military strikes to some form of super sanctions, but there is little confidence that a route to a peace deal will open up any time soon, with Iranian Supreme National Security Council secretary Mohsen Rezaei vowing to halt oil exports from the Gulf if the economic war continues. However, there are some hints that there may be splits opening up within Iran’s leadership about strategy and increased willingness among some to get back to the negotiating table."
Looking ahead to the rest of the week, quarterly results from Nvidia are due after the close on Wednesday, while new Federal Reserve chair Kevin Warsh will deliver at hotly-anticipated speech at the Jackson Hole Symposium on Friday.
In equity markets, corporate news was scarce as the summer lull well and truly kicked in ahead of the Bank Holiday weekend, but Diageo fizzed to the top of the FTSE 100 as RBC Capital Markets said chief executive Dave Lewis’ new cost-cutting and turnaround plan "makes sense".
BP was the worst performer on the index as oil prices fell.
Shell nudged a touch lower, meanwhile, following a report it has drawn interest from potential bidders, including ExxonMobil and LyondellBasell, for its US chemical assets. According to the Financial Times, the assets could fetch up to $8bn.
Elsewhere, GSK fell despite saying that its experimental hepatitis B drug had received its first global approval in Japan, while Jemperli has been granted priority review by the US Food and Drug administration as a potential treatment for rectal cancer.
Market Movers
FTSE 100 (UKX) 10,854.32 0.35%
FTSE 250 (MCX) 24,717.48 -0.01%
techMARK (TASX) 6,150.62 -0.29%
FTSE 100 - Risers
Diageo (DGE) 1,771.00p 3.03%
Weir (WEIR) 2,878.00p 2.71%
Airtel Africa (AAF) 336.00p 2.69%
London Stock Exchange Group (LSEG) 8,840.00p 2.58%
Pearson (PSON) 1,225.00p 2.47%
International Consolidated Airlines Group SA (CDI) (IAG) 432.20p 2.20%
Unilever (ULVR) 4,782.50p 2.17%
InterContinental Hotels Group (IHG) 162.75p 2.07%
Hiscox Limited (DI) (HSX) 1,832.00p 2.06%
Coca-Cola Europacific Partners (DI) (CCEP) 8,060.00p 1.90%
FTSE 100 - Fallers
BP (BP.) 533.70p -2.88%
Babcock International Group (BAB) 1,081.50p -2.26%
Melrose Industries (MRO) 462.00p -2.04%
GSK (GSK) 1,890.50p -1.46%
BAE Systems (BA.) 2,097.00p -1.36%
Kingfisher (KGF) 317.70p -1.12%
AstraZeneca (AZN) 12,110.00p -0.96%
Pershing Square Holdings Ltd NPV (PSH) 3,884.00p -0.82%
Autotrader Group (AUTO) 542.40p -0.80%
Games Workshop Group (GAW) 18,510.00p -0.80%
FTSE 250 - Risers
Playtech (PTEC) 412.20p 5.15%
Pollen Street Group Limited (POLN) 878.00p 3.66%
WPP (WPP) 399.90p 3.36%
B&M European Value Retail (BME) 243.60p 3.05%
TBC Bank Group (TBCG) 4,876.00p 2.22%
Endeavour Mining (EDV) 4,773.00p 1.99%
THG (THG) 34.28p 1.90%
Greggs (GRG) 1,876.00p 1.90%
Syncona Limited NPV (SYNC) 111.40p 1.83%
Cranswick (CWK) 5,430.00p 1.69%
FTSE 250 - Fallers
CMC Markets (CMCX) 709.00p -4.58%
Oxford Biomedica (OXB) 509.00p -3.23%
Kainos Group (KNOS) 1,254.00p -3.09%
Rightmove (RMV) 503.80p -2.67%
Avon Technologies (AVON) 1,778.00p -2.52%
Polar Capital Technology Trust (PCT) 623.50p -2.50%
W.A.G Payment Solutions (EWG) 103.60p -2.45%
Ocado Group (OCDO) 233.60p -2.26%
Oxford Instruments (OXIG) 2,760.00p -2.20%
Chemring Group (CHG) 558.00p -2.19%