LONDON MARKET MIDDAY: Stocks mixed; oil up on Middle East nerves

(Alliance News) - Stocks in Europe traded mixed on Monday afternoon, with a scarcity in US-Iran peace developments and an upcoming inflation reading keeping a lid on enthusiasm.

Europe had moved higher on Friday after a weak US jobs report took some sting out of US interest rate hike expectations. According to the CME FedWatch Tool, there is now a 56% chance the Federal Reserve holds next month. A week ago, the odds of a hold were around 33%.

Wednesday's US inflation reading could all but ensure that a hike is off the table next month.

The FTSE 100 index was down 26.50 points, 0.2%, at 10,874.59 midday Monday. The FTSE 250 edged up 34.21 points, 0.1%, at 24,889.07. The AIM all-share was up 4.02 points, 0.5%, at 799.91.

The Cboe UK 100 was down 0.3% at 1,080.63, the Cboe UK 250 sat 0.2% higher at 21,729.72, and the Cboe small companies lost 0.3% at 18,960.15.

In European equities on Monday, the CAC 40 in Paris was flat, while the DAX 40 in Frankfurt was up 0.3%.

Sterling was steady midday Monday at USD1.3499 versus USD1.3498 at the time of the London equities close on Friday. The euro fell marginally to USD1.1556 from USD1.1560. Against the single currency, the pound was flat at EUR1.1678 from EUR1.1677. The dollar climbed to JPY158.75 against the yen from JPY157.68.

The yield on the US 10-year Treasury widened to 4.66% from 4.65%, where it stood at the London equities close on Friday. The yield on the US 30-year Treasury stretched to 5.21% from 5.20%.

The Dow Jones Industrial Average is called down 0.1% in New York. The S&P 500 is called up 0.1% and the Nasdaq Composite up 0.3%.

The US labour market surprisingly shed jobs last month, in a nonfarm payrolls reading that sent the dollar into reverse on Friday.

The Bureau of Labor Statistics said nonfarm payrolls shrunk by 23,000 in July, after rising 20,000 in June. Payrolls had been expected to rise by 80,000 last month, however, according to consensus cited by FXStreet.

What's more, the reading for June was downwardly revised from 57,000, and the May data was lowered to 63,000 from 129,000.

Analysts at Barclays commented: "Our interpretation of the July employment report is that the labor market has largely returned to the path embedded in our forecast. If so, inflation becomes the primary remaining source of uncertainty for monetary policy. The next two rounds of monthly CPI and PPI estimates will therefore carry disproportionate weight in shaping the September meeting outcome.

"The key question is whether June represented the beginning of a more durable disinflation trend or simply a temporary pause in the inflation process. We think a result broadly in line with our forecast would leave the committee comfortable maintaining its current policy stance. A materially stronger print, however, would quickly revive debate around whether additional tightening may ultimately be required, especially if it came in a persistent category such as housing rents."

Wednesday's consumer price index data is expected to show the annual rate of inflation cooled to 3.4% last month from 3.5% in June.

A barrel of Brent surged to USD84.69 midday Monday, from USD83.40 late Friday afternoon. Gold was at USD4,339.26 an ounce, down from USD4,349.35.

US President Donald Trump is downplaying the prospect of reopening of the Strait of Hormuz as a diplomatic breakthrough with Iran fails to materialise, Axios reported on Sunday.

"We are low-keying it," Axios quoted him as saying in a phone call. The US will not devote itself fully to negotiations with Iran, Trump reportedly said.

"We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact they have no money," he told the news outlet, arguing that the US naval blockade of Iranian ports has worsened the situation.

"It will work out. It always works out. It's like a chess game," Trump said of the back-and-forth with Iran, according to Axios, which quoted US officials as saying Trump was focusing on de-escalation.

Tehran on Monday said Iranians had shown "they are professional chess players" in response to the remarks by Trump.

"Lights out or lights on, Iranians showed they are professional chess players," Iran's foreign ministry spokesman Esmaeil Baqaei said during a weekly press conference.

In London, Plus500 added 6.6%. The trading platform provider upped its payout and announced a USD100 million buyback.

Pretax profit in the first half of 2026 rose 0.8% to USD183.2 million from USD181.8 million a year prior, with revenue up 12% to USD462.9 million from USD415.1 million.

Vistry was 7.1% lower, the worst FTSE 250 performer. The Financial Times reported credit insurer Allianz Trade is cutting the cover it offers to suppliers of the housebuilder.

Citing people familiar with the decision, the FT said the move could result in cover being reduced by up to 70%. The final level of cover provided may hinge on Vistry's financial performance in times to come, the FT reported.

The likes of Allianz Trade insure suppliers in case customers fail to pay for services or products.

Jubilee Metals shares climbed 15%. It has received two binding offers for the acquisition of its Large Waste project. The offers are a "substantial premium to the original acquisition price".

It added: "The consideration together with remaining cash proceeds from the sale of the South African operations and the sale of non-core waste assets, offer substantial cash inflows nearing USD100 million, strengthening the company's balance sheet and offering accelerated investment into the continued expansion of the Zambian operations."

The metal processing company in April 2025 secured the exclusive rights to the waste project for USD18 million.

By Eric Cunha, Alliance News news editor

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