Oil prices fell back from earlier highs and stock markets staged a recovery on Monday after Iran announced the end of its military operations against Israel. Brent crude, which had surged to $98 a barrel earlier in the day, dropped to around $94.58, up just 1.75%. The pan-European Stoxx 600 index turned slightly positive, while London’s FTSE 100 closed up 5 points at 10,373.
The reversal came after Iran’s military joint command said it was halting offensive operations following an exchange of fire with Israel. The announcement followed a call from Donald Trump for both sides to “immediately stop shooting”. Government bond prices also recovered, pulling down yields on UK, US and eurozone debt.
Despite the calmer tone, concerns over the Middle East conflict weighed on housebuilders’ shares in London, amid fears that higher oil prices could keep borrowing costs elevated. In Asia, South Korea’s KOSPI index slumped by 8%, highlighting ongoing fragility in tech valuations.
On Wall Street, the S&P 500 rose 0.8%, with some investors eager to “buy the dip” after Friday’s sell-off. Joe Mazzola of Charles Schwab noted that “stocks scrambled higher early today, seeing some ‘buy the dip’ action after the chip sector’s 10% plunge made Friday Wall Street’s worst day of the year.”
In other news, the Financial Conduct Authority (FCA) has begun civil proceedings against fund manager Neil Woodford, accusing him of providing unauthorised investment advice through his subscription-based platform. The FCA is seeking an injunction to stop the activities, which it says breach the Financial Services and Markets Act 2000.
