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London stocks declined on Monday, mirroring the downturn in worldwide markets following Moody's downgrade of the U.S. sovereign credit rating, while investors paid attention to the UK-European Union summit. Global markets faced pressure on Monday as longer-dated U.S. Treasury yields increased following Moody's downgrade of the country's sovereign credit rating on Friday, prompted by concerns regarding the nation's escalating $36 trillion debt. Meanwhile, U.S. President Donald Trump's extensive tax-cut proposal, which had experienced delays due to Republican disputes over spending reductions, received approval from an important congressional committee on Sunday. Analysts, who are nonpartisan, estimate that the bill would augment the nation’s debt by $3 trillion to $5 trillion over the next ten years. The yield on the UK's 30-year gilt climbed to its highest level since April 11, reaching 5.494%. The rate-sensitive real estate sub-index fell by 1.4%. In other significant news, Britain has agreed to a major reset of its relationship with the EU since Brexit, working to eliminate some trade barriers and enhance collaboration on defence to strengthen its economy and improve security across the continent. This reset is a response to Trump’s disruption of the post-war global order, compelling governments worldwide to reconsider their relationships regarding trade, defence, and security.

Single Stock Stories & Broker Updates:

• BP's shares fell 1.1% to 368.5p. Jefferies downgraded the stock to "hold" from "buy" and reduced the price target from 550p to 390p, citing increased execution risk in BP's strategy due to a lowered oil price outlook for 2025/26. The company may need to choose between meeting leverage reduction targets or suspending buybacks. The stock is down ~6.23% YTD.

• Diageo's stock increased by 2.3% to 2,201p, making it one of the top percentage gainers on the FTSE 100 index. The British spirits manufacturer has initiated a $500 million cost-saving programme and anticipates a $150 million annual impact from tariffs, a decrease from the previously estimated $200 million in February. The company recorded a 5.9% growth in organic sales for Q3 and has reaffirmed its fiscal year forecast for organic net sales and operating profit. Year-to-date, the stock has declined by about 13%.

• BT Group shares rose 0.3% to 166.7p as it nears a deal to sell 50% of TNT Sports to Warner Bros Discovery, which has the option to buy BT's stake by the end of 2026. An announcement could come this week. BT is up ~15% YTD.

• Kainos Group shares fell 3.6% to 783.5p, marking the largest intraday decline since April 9, 2025. The IT software developer reported FY revenue of £367.2 million ($489.7 million), down 4% year-on-year, and FY adjusted PBT of £65.6 million, down 15%. The company announced a £30 million share buyback programme and is down 1.30% year-to-date.

Technical & Trade View

FTSE Bias: Bullish Above, Bearish below 8700

• Primary support 8500
• Below 8500 opens 8250
• Primary objective 8900
• Daily VWAP Bullish
• Weekly VWAP Bullish

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