FTSE 100 closes higher as oil price falls

London's stock markets closed higher on Monday, with the FTSE 100 index registering a 1.0% gain. The benchmark index finished the trading day at 10,782.87 points, up 108.93 points. This rise occurred as the oil price decreased and US technology stocks experienced a rally. However, chip manufacturer Nvidia bucked the trend, with its share price falling by 5.7%.

Nvidia Faces Scrutiny Over CEO's Relationship

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The decline in Nvidia's share price followed news of an investigation into chief executive Jensen Huang's relationship with Alice Huang, also known as Huang Le. US intelligence officials suspect Ms Huang of spying for China. Ms Huang has connections to Megaspeed International, a Singapore-based Nvidia customer that has faced allegations of attempting to divert advanced US chips to China. Mr Huang acknowledged the affair on Sunday and issued an apology. Nvidia stated that its board has initiated an independent investigation but has found no reason to believe national security or company secrets were compromised. Technology analyst Dan Ives described the situation as a "black eye moment" for Mr Huang, predicting multiple congressional inquiries and a potential market overhang.

China has dismissed the claims of spying as "baseless", as reported by The Standard. The issue was initially raised in May by short seller Culper Research, which alleged that Mr Huang maintained an "uncomfortably close relationship" with Ms Huang. Culper Research also questioned Nvidia's assertions that its direct exposure to China had significantly reduced following US trade restrictions implemented in April 2025.

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The broader market sentiment was boosted by a further fall in the oil price, influenced by hopes for diplomatic talks to end the US-Iran conflict. US President Donald Trump indicated on Sunday that renewed fighting with Iran was "highly unlikely" if talks progressed. Brent crude oil was trading at $94.27 a barrel on Monday, a decrease from $97.66 on Friday. This decline in oil prices positively impacted airlines and aerospace firms, with British Airways owner IAG rising 3.5% and Rolls-Royce up 4.8%. Miners also saw gains, with Antofagasta and Anglo American increasing by 6.2% and 5.2% respectively, supported by a high copper price.

In Europe, the CAC 40 in Paris rose 1.2%, and the DAX 40 in Frankfurt climbed 1.7%. US equity markets also performed well, with the Dow Jones Industrial Average up 1.8%, the S&P 500 2.0% higher, and the Nasdaq Composite gaining 2.4% around the time of the London market close.

Kainos Shares Plunge on Margin Concerns

On London's FTSE 250 index, which ended 0.8% higher at 24,706.34, Kainos shares experienced a significant drop of 12%. The IT support company reported half-year results that met expectations for revenue and profit, but its gross margin declined to 43.1% from 48.0%. Kainos attributed this reduction to increased use of contractors and partners, who operate on lower margins than its own staff. AJ Bell investment director Russ Mould noted that investors were "unimpressed" by the margin pressure and an "underwhelming" full-year outlook.

The pound was trading at $1.3415 against the dollar late Monday afternoon, up from $1.3362 on Friday. Against the euro, sterling weakened slightly to €1.1974 from €1.1989.