London's FTSE 100 managed to finish marginally higher on Monday after a brief stint in the red, though stocks were more or less rangebound with the UK benchmark index already trading near its all-time high.
After having slipped lower by mid-morning, stocks pushed back into positive territory in the final 30 minutes of trade, with the FTSE 100 settling up 0.2% at 10,386.23.
Despite the subdued finish, this was the second-highest close since last Wednesday's 10,402.34, with the index having gained 4.4% since the start of 2026 alone.
Political uncertainty in Westminster was weighing heavily on risk appetite - and Gilt prices - during the session, after Scottish Labour leader Anas Sarwar called on prime minister Kier Starmer to resign, citing the "distraction" from his alleged mishandling of the Epstein-Peter Mandelson scandal.
While Labour's Cabinet ministers publicly backed Starmer on Monday, the PM's director of communications and chief of staff Morgan McSweeney have now both resigned - with the latter taking "full responsibility" for advising the PM to appoint Mandelson as ambassador to the US. Mandelson is now facing a police investigation over his links to convicted sex offender Jeffrey Epstein.
"UK asset prices are under pressure today and UK Gilts are clear underperformers as the prime minister loses allies and support from his own party, in the aftermath of the Peter Mandelson scandal," said Kathleen Brooks, research director at XTB.
"A political risk premium is once again being built up in UK asset prices, as the market fears what a new leader could bring to the table in terms of economic policy."
Elsewhere, stocks across Europe surged, with the Dax in Frankfurt jumping 1.2%, Madrid's Ibex 35 surging 1.4% and Milan's FTSE MIB up 2.1%.
Meanwhile, Japanese shares hit a record high overnight in response to Sanae Takaichi and her ruling Liberal Democratic Party winning a massive victory in Sunday's national election.
Miners provide support
Precious metals miner Fresnillo and gold miner Endeavour shone as gold and silver prices rose. Miners more broadly were on the rise amid higher copper prices, with Antofagasta, Glencore, Rio Tinto and Anglo American all up.
Natwest shares slid 9% on the news the bank is buying wealth manager Evelyn Partners for £2.7bn and launching a new £750m share buyback. Natwest said the deal would increase fee income by 20% pre-revenue synergies. Evelyn Partners has £69bn of assets under management.
On the FTSE 250, Plus500 surged 7% after saying its FY 2026 performance was set to be ahead of market expectations following a better-than-expected performance in 2025, as it announced "significant" shareholder returns.
Greggs was under the cosh after broker Jefferies downgraded the shares to 'hold' from 'buy' and slashed the price target to 1,610p from 2,500p, saying that weight-loss jabs could dent demand for the bakery chain's products.