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UK Shares Little Changed Amid Geopolitical Movements; Tate & Lyle Accepts Takeover Bid

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London's FTSE 100 ended 0.05% higher on Monday as investors monitored renewed tensions between Iran and Israel after the two sides exchanged air strikes overnight for the first time since the April ceasefire.

Sentiment improved later in the session after the US pushed to preserve the truce and Iran said it had ended its current wave of strikes against Israel.

"The de-escalatory tone appears particularly evident from the US side, with Trump reportedly urging Israel not to strike back earlier last night, telling Axios that 'The Iranian strikes didn't hurt anybody. Hopefully Israel is not going to retaliate," Deutsche Bank Research said.

In corporate news, Tate & Lyle (TATE.L) surged 14.77% after the food and beverage products supplier agreed to a recommended cash acquisition offer from US-based Ingredion for a valuation of 2.7 billion pounds sterling.

On the downside, water supply company Severn Trent (SVT.L) dropped 1.42% after Deutsche Bank Research reduced its price target to 31.50 pounds from 33 pounds with a hold rating.

"UK government policy has been highly supportive for UK utilities, encouraging record investment. However, prediction markets price in a high probability (>80%) of a new Labour Prime Minister being selected this year, with Andy Burnham the favourite (Oddschecker). Mr Burnham advocates for stronger 'public control' of UK water and energy utilities, creating some uncertainty," analysts said.

Investors are now looking ahead to a busy week of UK economic data, including the British Retail Consortium's retail sales monitor on Tuesday, the RICS House Price Balance on Thursday, and monthly gross domestic product, industrial and manufacturing production, index of services, and trade balance reports on Friday.

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