Oil prices fell back and European stock markets recovered on Monday after Iran announced the end of its military operations against Israel, easing fears of a broader conflict in the Middle East. Brent crude, which had surged to $98 a barrel earlier in the day, settled at $94.58, up 1.75%. The pan-European Stoxx 600 index turned slightly higher, while London's FTSE 100 closed up 5 points at 10,373.
Investors took some comfort from a rally on Wall Street, where the S&P 500 rose 0.8%, suggesting that Friday's sell-off may not signal the start of a prolonged downturn. However, concerns remain over tech valuations after South Korea's KOSPI index slumped by 8%. Housebuilders' shares in London fell on worries that the conflict could keep borrowing costs elevated.
Mike Bell, head of market strategy at RBC BlueBay, noted that investors have been conditioned to 'buy the dip' after significant declines. Joe Mazzola of Charles Schwab added that the chip sector's 10% plunge on Friday prompted bargain-hunting, though inflation data due later this week could reinforce concerns about expensive crude spilling into the broader economy.
In other news, the Financial Conduct Authority (FCA) has launched civil proceedings against former fund manager Neil Woodford, accusing him of providing unauthorised investment advice and financial promotions through his subscription platform W4.0. The FCA is seeking an injunction to stop the potentially unlawful activities, which it says breach the Financial Services and Markets Act 2000.
