The FTSE 100 reversed early losses to trade higher on Monday as surging oil prices lifted energy stocks, even as the U.S.-Iran standoff over the Strait of Hormuz kept risk appetite in check. Jaguar Land Rover's announcement of nearly 4,000 job cuts and a first annual house-price decline since 2023 added to pressure on the UK economy.
Oil rally lifts FTSE energy heavyweights
The FTSE 100 traded up 0.27% as of 09:25 ET (13:25 GMT), reversing earlier losses, while Germany's DAX extended its losses 0.28% and France's CAC 40 turned positive, up 0.35%. Sterling firmed too, with GBP/USD up 0.167% at 1.3537.
Energy majors led the gains: BP rose 2.02% and Shell gained 1.76%. Brent crude extended gains to 1.07% at $97.31, while WTI rose 0.92% to $92.32. Gold moved the other way, with December futures down 0.78% at $4,441.89 and spot gold off 0.75% at $4,396.92.
Hormuz traffic thins as Iran signals exclusion zone
Traffic through the Strait of Hormuz fell to its lowest level since May, with analytics firm Kpler recording an average of just 10 ships per day, down from a 10-day average of 13 on Saturday and more than 15 on Friday; only two vessels transited Saturday and six on Sunday, per Reuters. Iran's Supreme National Security Council head Mohsen Rezaei said Tehran would announce a maritime "exclusion zone" outside the strait, extending through Hormuz into the Persian Gulf.
Iran's foreign ministry said Iran-Oman talks on a temporary safe passage through Hormuz had reached their "final stage," with an understanding to be registered with the International Maritime Organization within the coming days. Qatar warned Monday that Gulf states cannot rely on the U.S. alone for security.
JLR job cuts compound UK economic pressure
Jaguar Land Rover added to the strain on the UK economy, announcing it would cut nearly 4,000 jobs — close to 10% of its global workforce — through voluntary redundancies over two years, targeting £1.7 billion in savings and a lower break-even point toward 300,000 vehicles. The Tata-owned carmaker cited intense competition and ongoing geopolitical uncertainty as the reasons behind the cuts. Business Secretary Jonathan Reynolds spoke with JLR chief executive PB Balaji, with further talks alongside unions expected this week.
The cuts came hours after Chancellor John Healey pledged to cut business regulation by 25% by the end of Parliament and announced a £150m British Business Bank fund for northern scale-ups.
Bond market unease meets weaker house prices
UBS economist Dean Turner warned that bond vigilantes are "relearning what their predecessors in the 1980s always knew: fiscal arithmetic matters", arguing the recent bond market sell-off signals a shift from monetary policy to fiscal sustainability. Jefferies' Mohit Kumar flagged this week's U.S. CPI and Wednesday's ECB decision as the next catalysts alongside continued Gulf risk, noting September Fed hike odds near 60% after Friday's payrolls beat.
Separately, Lloyds data showed British house prices fell 0.4% year-on-year in August, the first annual decline since November 2023 and a miss against forecasts for a 0.2% rise.
Source: Investing.com
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