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Highlights
FTSE 100 opens flat amid ongoing Israel-Iran military conflict and global tension
Market eyes central bank policy meetings from BoJ, Fed, BoE, SNB and others
UK house prices ease in June; Entain and Wood Group post notable corporate updates
London stocks began the week on a muted note as the FTSE 100 index opened flat, reflecting a cautious stance amid renewed conflict between Israel and Iran. Despite missile strikes and rising fatalities across the region, broader market sentiment has not fully priced in supply disruptions or deeper geopolitical escalation.
Oil prices showed only marginal gains in early trading while gold prices declined, highlighting the limited market reaction thus far. European and US equity futures pointed towards mild gains, suggesting cautious optimism despite underlying concerns.
Middle East Escalation Sparks Caution But No Sharp Market Moves Yet
Tensions between Israel and Iran remain high as both nations continue to engage in active military operations. Over the weekend, Israeli forces launched coordinated strikes on nuclear and military installations, triggering a counter-response from Iran.
While the scale and intensity of the conflict have raised alarm, financial markets appear to be absorbing the risk with relative calm. Factors such as excess oil supply forecasts and increased Opec+ production are helping to dampen the initial impact on commodities.
Meanwhile, geopolitical commentary from former US President Donald Trump about seeking a resolution while avoiding direct military engagement has also helped maintain market stability, albeit tentatively.
Central Bank Decisions Take Centre Stage This Week
Beyond geopolitical developments, attention has shifted towards a significant week for global monetary policy. Investors await updates from major central banks including the Bank of Japan, the Federal Reserve, the Riksbank, Norges Bank, the Bank of England, and the Swiss National Bank.
These institutions are expected to provide fresh insights into interest rate strategies and inflation expectations, both of which remain key drivers for equities, bonds, and currency markets.
Any divergence in policy stances could add volatility, particularly if inflationary pressures or labour market conditions prompt unexpected shifts.
UK House Prices Ease After April-May Gains
Data from Rightmove showed that UK house prices declined slightly in June, reversing some of the momentum seen in April and May. The dip follows changes to stamp duty thresholds that took effect earlier in the year, prompting a rush in property transactions ahead of the revised rules.
Despite the easing, year-on-year comparisons suggest that overall activity remains resilient, supported by continued buyer demand. Agents noted that sellers are increasingly adopting more competitive pricing strategies to attract interest, especially in areas with high stock levels.
Entain Upgrades BetMGM Outlook; Wood Group Secures Long-Term Contract
In corporate news, Entain plc (LON:ENT) upgraded its full-year expectations for BetMGM following a robust performance during the first half. The joint venture with MGM Resorts is expected to surpass earlier revenue estimates, driven by strong growth in the US market.
Separately, Wood Group (LON:WG) and its joint venture partner Tendrill International announced a new five-year agreement with Brunei Shell Petroleum. The contract covers brownfield engineering, procurement, and construction services across both onshore and offshore assets in Brunei.
