London stocks are expected to open lower on Monday, despite fresh comments from Donald Trump suggesting a potential deal with Iran “could be soon.”
Futures indicate the FTSE 100 will open around 34 points lower (-0.4%), following a subdued close on Friday.
Markets remain under pressure as geopolitical risks continue to dominate sentiment. Trump also floated the idea of the US taking control of Iran’s oil infrastructure, including Kharg Island, while Iranian officials warned of a potential ground conflict and signalled plans to reshape governance of the Strait of Hormuz, possibly introducing a toll system.
Oil prices have climbed sharply, with Brent crude rising above $116 a barrel, its highest level in nearly two weeks, amid intensifying conflict in the Middle East.
Prices jumped more than 3% on Monday, putting oil on track for what could be its largest monthly gain on record, driven by fears of supply disruption and a widening regional conflict.
Global markets reflect the cautious mood. Wall Street ended last week sharply lower, while Asian equities fell on Monday, led by a 3.2% drop in Japan’s Nikkei 225.
Meanwhile, G7 ministers are set to meet to assess the economic fallout from the conflict, as rising oil and gas prices continue to ripple through global markets.
Currency markets also show a defensive tilt, with sterling weakening against the dollar, while gold prices edged higher, signalling ongoing demand for safe-haven assets.
Overall, despite tentative signs of diplomacy, investors remain focused on energy risks and escalation scenarios, keeping market sentiment fragile.
