London stocks are expected to open lower on Tuesday as investors await UK unemployment, earnings and public sector finance data.
FTSE 100 futures point to a decline of 60 points, or 0.6%, after the blue-chip index closed 0.7% lower at 10,524.76 on Monday.
Sterling strengthened to US$1.3446 from US$1.3418 at Monday’s London close. Against the euro, the pound rose to EUR1.1767.
Middle East tensions remained in focus after the US State Department urged American citizens worldwide to exercise increased caution over the Iran conflict.
Iran’s Revolutionary Guards said they had struck US military targets, including air defence systems in Bahrain and Kuwait.
Oil prices eased slightly on Tuesday despite Iran’s Revolutionary Guards saying they had struck US military targets in Bahrain and Kuwait.
Brent North Sea crude fell 0.63% to US$88.59 a barrel, while West Texas Intermediate slipped 0.3% to US$82.98.
The move suggests traders are still weighing the risk of further escalation against reports of possible diplomatic efforts to revive a temporary ceasefire.
Sterling also softened, easing to US$1.3430.
UK gilt yields rose after comments on the public finances from new Prime Minister Andy Burnham, as investors assessed the early policy direction of the new government.
UK politics also remained a key focus as Prime Minister Andy Burnham’s new government announced plans to remove VAT from domestic electricity bills from 1 October. The government said the measure would be funded by savings from the cancelled digital ID programme.
US President Donald Trump said he had held a “very good conversation” with Burnham and that the two leaders would meet in the near future.
Wall Street closed lower on Monday, with the Dow Jones down 0.6%, the S&P 500 falling 0.2% and the Nasdaq Composite losing 0.6%.
Asian markets were mixed. Japan’s Nikkei rose 2.4% and China’s Shanghai Composite gained 0.8%, while Hong Kong’s Hang Seng slipped 0.2% and Australia’s S&P/ASX 200 fell 0.2%.
