London stocks are set to open lower on Tuesday after fresh US military strikes in Iran renewed concerns that the fragile ceasefire in the Middle East could unravel.
Futures indicate the FTSE 100 will open around 63 points lower, or 0.6%, at 10,402.76 after the blue-chip index closed 0.2% higher at 10,466.26 on Friday.
Markets in both the UK and US were closed on Monday for public holidays.
The latest geopolitical tensions followed confirmation from US Central Command that American forces carried out strikes against missile launch sites and vessels allegedly attempting to lay naval mines in southern Iran.
The attacks came as senior Iranian negotiators arrived in Doha for renewed talks aimed at ending the conflict.
Marco Rubio said discussions with Iran were continuing despite the escalation, adding that negotiations remained focused on finalising language around a possible agreement.
Brent crude initially rebounded following the strikes but later eased back to around US$98.28 a barrel, below Friday’s level of US$104.22, although still above Monday’s intraday lows.
Currency markets were relatively stable, with sterling strengthening modestly to US$1.3478 against the dollar, while gold prices edged higher as investors sought defensive assets.
Meanwhile, Chancellor Rachel Reeves instructed ministers to prioritise British firms for government contracts in sectors including shipbuilding, steel, artificial intelligence and energy infrastructure, citing national security concerns.
Fresh retail data also showed UK shop price inflation ticking up to 1.2% in May from 1.0% previously, according to figures from the British Retail Consortium.
Asian markets traded mixed overnight, with Japan’s Nikkei 225 slipping 0.2%, China’s Shanghai Composite falling 0.7% and Hong Kong’s Hang Seng edging 0.2% higher.
On Wall Street last Friday, the Dow Jones Industrial Average rose 0.6%, while the S&P 500 and Nasdaq Composite gained 0.4% and 0.2% respectively.
