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Highlights
European equities opened lower as Middle East conflict weighed on sentiment
LON:RR. and LON:AML showed limited movement despite UK-US trade deal announcement
LON:TA35 and LON:TA125 indexes in Israel extended recent gains
European markets began Tuesday's session on a subdued note, with key benchmarks such as the FTSE 100 and FTSE 350 reflecting cautious investor sentiment amid ongoing geopolitical developments in the Middle East. The cautious tone followed continued hostilities involving Israel and Iran, as regional tensions entered a fourth day.
Despite the broader negative tone across FTSE, stocks listed in Tel Aviv stood out. The (LON:TA125) index remained resilient, notching further gains from the previous session, while (LON:TA35) continued to climb. Both indices reached new peaks, reflecting domestic momentum that contrasted with widespread selling across other global markets.
In contrast, the announcement of a new trade agreement between the United Kingdom and the United States late Monday had minimal immediate impact on key UK-listed equities. The trade accord, covering tariff reductions on specific sectors such as automotive and aerospace, was followed by modest moves in shares tied to those industries.
(LON:AML), a manufacturer known for its performance vehicles, recorded a slight increase. The firm is generally sensitive to shifts in trade policy due to its international supply chain and export markets. However, the muted response indicates the development may have been anticipated or already reflected in valuations.
Aerospace and defense firm (LON:RR). experienced a mild decline despite the agreement's focus on zero tariffs for aerospace parts. The firm, a notable name in FTSE Dividend Stocks, did not see significant uplift, suggesting that further clarity on the steel and pharmaceutical sectors—still under discussion—could be awaited before a market reassessment.
Broader European indices showed volatility, with shares across the eurozone and Asia-Pacific slipping amid global concerns. Meanwhile, U.S. stock futures also trended downward, reflecting international caution as geopolitical uncertainty continues to influence market behavior.
While the agreement between the U.K. and the U.S. marks a notable diplomatic milestone, markets appeared focused on unresolved details and broader global developments, including commodity price movements and regional risks. Sectors such as pharmaceuticals and steel in the UK remain under review as final trade provisions have yet to be confirmed.
