UK equities edged lower on Monday as investors braced for tougher U.S. sanctions against Iran, adding to a cautious mood across global financial markets.
The FTSE 100 fell 0.03% as of early trading, with European peers also declining, Germany’s DAX down 0.25% and France’s CAC 40 slipping 0.18%.
Sterling held steady against the U.S. dollar, with GBP/USD trading at 1.3643 as currency markets remained largely subdued amid the broader uncertainty.
Investor attention remained firmly fixed on Washington as markets awaited further economic measures targeting Tehran following escalating rhetoric from both sides.
U.S. Treasury Secretary Scott Bessent described the sanctions campaign as entering an “endgame” in a post on social media platform X and warned of an “economic D-Day”.
Iran’s Supreme National Security Council Secretary Mohsen Rezaei responded sharply, warning that Tehran could stop oil exports through the Strait of Hormuz if pressure continued to mount.
Rezaei also said countries supporting the U.S. campaign could be regarded as committing an “act of war”, remarks that kept geopolitical risks squarely at the forefront for investors worldwide.
Speaker Mike Johnson said in an interview with Fox News that the United States was moving into a “new phase” of the conflict with Iran and that allied countries would provide assistance.
Johnson also said Republicans could retain control of the House of Representatives even if the conflict continued through the November midterm elections, adding a political dimension to the uncertainty.
Negative sentiment was reinforced by heavy selling across Asian technology stocks, with South Korea’s KOSPI falling sharply and Hong Kong’s Hang Seng dropping approximately 2.1%.
Samsung Electronics and Alibaba were among the notable technology names under pressure during the Asian session, adding to broader caution across global markets.
Investors are also preparing for Nvidia’s (NASDAQ:NVDA) earnings on Wednesday, with Federal Reserve Governor Kevin Warsh’s speech at Jackson Hole later in the week also expected to attract significant attention.
Oil prices moved lower despite the continuing geopolitical uncertainty surrounding the Strait of Hormuz, with Brent crude declining 1.7% to $91.09 a barrel and WTI falling 2.1% to $85.25.
Gold moved in the opposite direction as demand for safe-haven assets increased, with December gold futures gaining 0.42% to $4,700.31 and spot gold rising 0.9% to $4,644.70.
On the corporate front, Shell (LSE:SHEL) has reportedly attracted interest from ExxonMobil, LyondellBasell, Apollo and Kuwait Petroleum for its U.S. chemicals operations, according to a Financial Times report published on Monday.
The portfolio could be valued at as much as $8 billion as Shell considers disposing of underperforming chemicals assets, a move that could represent one of the more significant corporate transactions in the energy sector this year.