London stocks are expected to open broadly unchanged on Tuesday, with FTSE 100 futures indicating a marginal 2-point decline, after the index suffered its sixth consecutive fall on Monday.
The subdued outlook comes as Brent crude surged above $91 a barrel, with tensions in the Middle East remaining elevated and uncertainty continuing over the Strait of Hormuz.
European markets are expected to fare worse, with Germany’s DAX 40 called 0.5% lower and France’s CAC 40 down 0.4%.
Oil remains one of the key risks for global markets. Brent climbed to $91.62 a barrel from $89.07, as hopes of progress between Washington and Tehran weakened. Higher energy prices are renewing concerns about inflation and the outlook for interest rates.
Sterling slipped to $1.3537, while US Treasury yields moved higher, with the 10-year yield reaching 4.74% and the 30-year yield climbing to 5.32%.
Asian markets were predominantly weaker. Japan’s Nikkei 225 dropped 2.1%, while Hong Kong’s Hang Seng fell 0.5% and China’s Shanghai Composite declined 0.3%.
Investors in London will now turn their attention to UK employment and wage figures, which could provide further clues about the Bank of England’s next move on interest rates.
Mining stocks could provide some support after BHP reported a 9% increase in annual attributable profit to $9.83 billion, alongside a 15% increase in revenue and a substantially higher dividend.
