London stocks are set for a weaker open on Monday, as fading hopes of a Middle East peace deal weigh on sentiment following reports of US military action against an Iranian vessel.
Futures indicate the FTSE 100 will open 48.9 points lower, or 0.5%, at 10,618.73. The index closed up 0.7% at 10,667.63 on Friday.
In currency markets, sterling slipped to USD1.3488 from USD1.3556 at the previous London close, while holding broadly steady against the euro at EUR1.1480. The euro weakened to USD1.1749, and the dollar strengthened against the yen to JPY158.99.
Geopolitical tensions have intensified. Iranian state media indicated Tehran does not plan to attend upcoming talks with the US, after Donald Trump ordered negotiators to Pakistan ahead of the expiring ceasefire.
The situation has been further complicated by reports that a US destroyer fired on an Iranian vessel attempting to evade interception—raising doubts over the near-term prospects for diplomacy.
Iranian outlets, including IRIB and IRNA, cited the ongoing US naval blockade and what they described as “unrealistic demands” from Washington as key obstacles to progress, warning that the outlook for negotiations remains uncertain.
Oil markets reacted to the escalation, with Brent crude rising to USD95.29 per barrel from USD89.15 on Friday. The Strait of Hormuz remained closed over the weekend, with senior Iranian officials suggesting a comprehensive peace deal is still distant.
On Wall Street, stocks ended Friday strongly, with the Dow Jones Industrial Average up 1.8%, the S&P 500 gaining 1.2%, and the Nasdaq Composite rising 1.5%.
Asian markets were mixed on Monday. Japan’s Nikkei 225 rose 0.8%, while China’s Shanghai Composite gained 0.5% and Hong Kong’s Hang Seng Index added 0.4%. Australia’s S&P/ASX 200 edged lower.
Gold prices eased to USD4,784.50 per ounce from USD4,869.13 late Friday, as markets balanced geopolitical risk against broader macro sentiment.
