|
Stock prices in Europe were mostly lower on Monday midday as investor sentiment worsened in March; meanwhile the chances of interest rate hikes in the eurozone and UK were seen higher after the price of Brent oil passed $100 per barrel. The FTSE 100 index was down 114.36 points, 1.1%, at 10,170.39. The FTSE 250 was down 411.92 points, 1.8%, at 22,089.03, and the AIM all-share was down 16.89 points, 2.2%, at 767.81. The Cboe UK 100 was down 1.1% at 1011.42, the Cboe UK 250 was down 2.2% at 19.434.02, and the Cboe small companies was down 0.5% at 17928.50. In European equities on Monday, the CAC 40 in Paris was down 2.0%, while the DAX 40 in Frankfurt was down 1.6%. Oil markets remained at the centre of attention. Brent was quoted at $103.93 a barrel at midday in London, up sharply from $90.85 late Friday, after surging earlier to just below $120 as Iran launched retaliatory strikes against crude-producing Gulf nations. Dan Coatsworth, head of markets at AJ Bell, said: ‘Tipping over the $100 a barrel level has major implications from a psychological and economical perspective. It significantly raises the chances of a sharp jump in inflation and interest rates shifting to a completely different path than the market had priced in only two weeks ago.’ Both Brent and West Texas Intermediate had jumped around 30% at one stage, while European gas prices also climbed roughly 30% on fears of supply disruption. Since the conflict began on February 28, WTI has risen more than 75% and Brent over 60%, though prices remain below the peaks seen in 2022 at the outbreak of the war in Ukraine. London’s oil majors Shell and BP benefited from the spike, up 2.0% and 1.5% respectively, and were among only ten in positive territory on the FTSE 100. The rally in crude later cooled after the Financial Times reported that G7 finance ministers would discuss a coordinated release of emergency reserves with the International Energy Agency. French President Emmanuel Macron said the use of strategic reserves is ‘an option being considered’ as finance ministers prepared for crisis talks, adding that a possible meeting of G7 leaders this week on energy coordination was also being examined. US President Donald Trump attempted to downplay the market reaction, saying prices would ‘drop rapidly when the destruction of the Iran nuclear threat is over’ and describing the spike as a ‘very small price to pay’. ‘ONLY FOOLS WOULD THINK DIFFERENTLY,’ he wrote on Truth Social. After Iran’s supreme leader was killed in an Israeli strike at the start of the war, his son Mojtaba Khamenei was named successor on Sunday, a move likely to draw Trump’s ire, having previously called him an ‘unacceptable’ choice. EU chief Ursula von der Leyen warned that the war’s impact was already being felt in Europe, citing higher energy prices, trade disruptions and security concerns. ‘We are now seeing a regional conflict with unintended consequences. And the spillover is already a reality today,’ she said ahead of a call with Middle Eastern leaders. Against this backdrop, traders pushed up rate expectations. Markets are now pricing in a rate hike from the Bank of England and two increases from the European Central Bank this year, sending bond markets lower as rising energy costs stoke inflation concerns. Both the UK and Europe are seen as vulnerable to renewed energy shocks. AJ Bell’s Coatsworth said: ‘Markets are now pointing towards a situation where UK interest rates could remain level for the rest of the year and potentially go up in 2027. That is radically different from recent expectations of more cuts this year.’ The pound was quoted at $1.3347 at midday on Monday in London, lower compared to $1.3387 at Friday’s close. The euro stood at $1.1559, lower against $1.1597. Against the yen, the dollar traded at JP¥158.47, up from JP¥157.62. In the US, markets were called lower, with Dow futures indicating a 1.3% fall, the S&P 500 down 1.0% and the Nasdaq down 1.1%. The yield on the US 10-year Treasury was quoted at 4.18%, widening from 4.16%. The yield on the US 30-year Treasury was quoted at 4.79%, widening from 4.78%. Investor sentiment deteriorated sharply in March, according to Sentix. The eurozone index fell to minus 3.1 from plus 4.2 in February, with the expectations index sliding to plus 3.5 from plus 15.8. In the US, the overall index dropped to plus 7.2 from plus 12.7, while the expectations gauge turned negative at minus 4.0 from plus 4.0. On the economic front, new manufacturing orders in Germany fell 11.1% on-month in January, reversing December’s 6.4% increase, which was revised down from 7.8%. On-year, orders rose 3.7%, slowing from an 11.7% increase in December, also revised down. Back in London, Admiral Group led the FTSE 100, up 2.2%, after Jefferies raised its price target to 3,770p from 3,580p with a ’buy’ rating, while Citigroup lifted its target to 3,277p from 3,178p and reiterated ’neutral’. Pearson was among the top gainers, up 1.1%, after accelerating its £350 million share buyback programme and reaffirming its confidence in 2026. The education publisher said it has updated arrangements with Citigroup and now expects the first tranche of the buyback to conclude on or before April 2. It maintained guidance for adjusted operating profit of £640 million to £685 million for 2026, with underlying sales growth in the mid-single digits. Among smaller caps, Stack BTC jumped 55%. The crypto firm, chaired by former Tory chancellor Kwasi Kwarteng, announced a £260,000 equity fundraising from Blockchain.com and Reform UK leader Nigel Farage, who said the UK should become a ‘major global hub for the crypto industry’. Kwarteng said the company was ‘building momentum’. Gold was quoted at $5,089.22 an ounce, lower against $5,142.35 on Friday. Still to come on Monday’s economic calendar are US consumer inflation expectations. Copyright 2026 Alliance News Ltd. All Rights Reserved.
|
