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The FTSE 100 closed down on Monday, weighed by falls in Marks & Spencer, J Sainsbury and Shell, as the stalemate in the Middle East dragged on.

The FTSE 100 closed down 57.99 points, 0.6%, at 10,321.09.

The FTSE 250 ended down just 3.38 points at 22,579.43, and the AIM All-Share fell 1.22 points, 0.2%, at 795.18.

Hopes that Iranian foreign minister Abbas Araghchi’s visit to Islamabad would spur fresh negotiations with the US were dashed as US President Donald Trump scrapped a planned trip by envoys on Saturday.

Mr Trump told Fox News after calling off his emissaries’ trip that if Iran wanted talks, “they can come to us, or they can call us”.

On Monday, Mr Araghchi visited Moscow for talks, and Kremlin spokesman Dmitry Peskov said Russia is ready to offer “goodwill or mediation services” in future negotiations between Iran and the US.

Susannah Streeter, chief investment strategist at Wealth Club, said there was “a distinct lack of Monday motivation for stocks”.

“The rug has been pulled by the Trump administration, sending plans for talks over Iran skidding once again… the lack of progress has hit sentiment at the start of the week,” she added.

Brent oil traded at 108.92 US dollars a barrel on Monday afternoon, higher compared with 105.78 dollars at the time of the equities close in London on Friday.

In European equities on Monday, the CAC 40 in Paris ended down 0.2%, as did the DAX 40 in Frankfurt.

In New York, the Dow Jones Industrial Average was down 0.3%, the S&P 500 was 0.2% lower, and the Nasdaq Composite declined 0.3%.

The yield on the US 10-year Treasury was 4.32% on Monday, unchanged from Friday.

The yield on the US 30-year Treasury widened to 4.93% from 4.92%.

The pound firmed to 1.3549 dollars on Monday afternoon from 1.3497 dollars on Friday.

Against the euro, sterling rose to 1.1543 euros from 1.1532 euros.

The euro traded higher against the greenback, rising to 1.1733 dollars on Monday from 1.1703 dollars on Friday.

Against the yen, the dollar was trading at 159.27 yen, lower from 159.55 yen.

Central bank meetings dominate financial markets this week, with interest rate calls in Japan, the US, Europe and the UK – with no changes expected.

In the US, Bank of America (BofA) expects the Federal Reserve to remain “firmly on hold” at its April meeting.

“The inflation outlook is arguably as cloudy as it was at the time of the March meeting. Meanwhile, the recent labour data show resilience and potentially some green shoots. The big question around the FOMC statement is whether it will indicate that risks to the policy path are two-sided. We think it won’t, but it’s a close call. We anticipate only one dissent,” BofA said.

In the UK, analysts expect the Bank of England (BoE) to leave interest rates unchanged at 3.75% amid the Middle East crisis.

After months of finely balanced decisions, March saw a decisive 9-0 vote in favour of keeping rates on hold as the inflationary impact of the war unfolds.

Another strong vote to hold rates is expected, with analysts seeing a 9-0, 8-1, or 7-2 make-up in favour of the status quo.

RBC Capital Markets thinks BoE chief economist Huw Pill could be the lone dissenter at the meeting and back a rate increase.

Bank of America thinks Megan Greene could join Mr Pill in pressing the case for higher rates.

On London’s FTSE 100, Marks & Spencer fell 4.8% after Worldpanel data for the 12 weeks to March 29 showed a material slowdown in the UK clothing market to minus 3.8% year-on-year versus minus 1% in the 12 weeks to March 1.

JPMorgan analyst Georgina Johanan said while the figures were on a “tougher comparative as the market laps the helpful weather in the prior year”, the result is “nevertheless soft”.

Ms Johanan highlighted a deceleration at M&S, where sales fell 0.5% year-on-year in the reported period from growth of 3.2% in the prior 12 weeks.

Food retailer J Sainsbury declined 3.4%, hit by downgrades by Goldman Sachs and Citi.

Goldman Sachs double-downgraded London-based Sainsbury to “sell” from “buy”, while analysts at Citigroup moved to “neutral” from “buy”.

Both downgrades followed further reflection upon last week’s full-year results, the brokers said.

In a research note, Goldman analyst Richard Edwards said that, while financial 2026 earnings before interest and tax, and free cash flow, were in line with his expectations, “the outlook from here is likely to be more challenging”.

Mr Edwards and Citi analyst Elizabeth Moore both reduced earnings forecasts and share price targets for the grocer.

Shell fell 1.7% after it announced the 16.4 billion US dollar cash-and-shares acquisition of Canadian energy company ARC Resources.

The London-based oil major said the deal is expected to generate double-digit returns, bolstering long-term cash flows, and is accretive to free cash flow per share from 2027 onwards.

Under the deal, ARC shareholders will receive 8.20 Canadian dollars in cash and 0.40247 ordinary shares of Shell for each ARC share.

This values ARC equity at around 13.6 billion US dollars based on Shell’s closing price on Friday. In addition, Shell will take on around 2.8 billion US dollars in net debt and leases, resulting in an enterprise value for the deal of 16.4 billion US dollars.

Gold traded down at 4,677.74 US dollars an ounce on Monday, from 4,718.34 dollars at the same time on Friday.

The biggest risers on the FTSE 100 were Burberry Group, up 25.6p at 1,173.2p, Smith & Nephew, up 24p at 1,182p, Standard Chartered, up 21.4p at 1,763.8p, M&G, up 3.4p at 298p and IG Group, up 17p at 1,526p.

The biggest fallers on the FTSE 100 were Entain, down 32.6p at 567p, Marks & Spencer, down 16.65p at 330.35p, Endeavour Mining, down 162p at 4,386p, J Sainsbury, down 11.5p at 333p and Weir Group, down 94p at 2,902p.

Tuesday’s global economic calendar has an interest rate decision in Japan overnight, UK grocery market share data at 0800 BST, plus US house price figures and the Conference Board consumer confidence report.

Tuesday’s local corporate calendar has first-quarter results from oil major BP, lender Barclays and kitchen supplier Howden Joinery.

Contributed by Alliance News