Global financial markets showed signs of recovery on Monday after Iran announced the end of its military operations against Israel, easing fears of a broader conflict in the Middle East. The oil price, which had surged earlier in the day, fell back sharply, while European and US stock markets rallied.
Brent crude oil was trading up just 1.75% at $94.58 a barrel, having hit $98 earlier in the day. European stock markets shook off earlier losses, with the pan-European Stoxx 600 index edging higher. London's FTSE 100 closed up 5 points, or 0.05%, at 10,373 points, while the S&P 500 on Wall Street rose 0.8%.
The recovery came after Tehran announced a halt to its offensive operations, following a request from former US President Donald Trump for both sides to “immediately stop shooting”. The de-escalation helped calm markets that had been rattled by the weekend's exchanges of fire between Israel and Iran.
However, concerns remain over the impact of the conflict on borrowing costs, with housebuilders' shares falling in London. In Asia, South Korea's KOSPI index slumped by 8%, highlighting ongoing volatility in tech valuations.
Investors were also digesting data from the Federal Reserve Bank of New York showing that US households have grown more worried about their financial situation, with the share of Americans who believe things are much worse than a year ago hitting a nearly four-year high.
