Achi news desk-
Israel has not admitted responsibility for the Damascus attack and the world is waiting to see how it will respond to the attack by Iran, as allies urge caution and the need to de-escalate the crisis.
The FTSE lost some ground in a relatively quiet opening yesterday, regaining some ground as the session wore on after falling in early trading, while Brent Crude gave up some of the gains made on Friday. In mid-afternoon trading, Brent crude for June delivery was at $89.72, down from $90.45 at Friday’s close.
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In the US, futures linked to the Dow Jones Industrial Average, S&P 500 and Nasdaq-100 made gains following last week’s sell-off, boosted by strong results from investment bank Goldman Sachs.
But while financial markets appeared to be making strides in the Middle East, there were concerns that risks remained.
Nigel Green, chief executive of investment adviser deVere Group, warned that Monday’s “small relief rally” does not mean investors can “sit back and relax”.
He said: “There seems to be an element of a small relief rally because, so far at least, Israel is [Prime Minister Benjamin] Netanyahu appears to be following US President Joe Biden’s instruction not to retaliate and risk escalating the situation even further.
“However, the situation remains highly volatile and investors serious about protecting and growing their capital cannot now sit back and relax.”
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Susannah Streeter, head of money and markets at stockbroker Hargreaves Lansdown, said the week had started on a “stressful note, with unease still clouding sentiment”.
Ms Streeter said: “Investors are on alert for retaliatory action following Iran’s attack on Israel. Fears are rising that a dangerous new chapter of escalating conflict is about to begin. All eyes are on diplomatic efforts being made to diffuse the situation which has helped to reduce a sharp rise in oil prices.
“The FTSE 100 has been on the back foot in early trade, retreating from the record highs the index flirted with on Friday. Although defense company BAE Systems gained ground amid expectations of higher military spending, energy stocks are on the back foot as oil prices eased slightly.
“Concerns have also deepened about stubborn inflation in the US, following a rebound in the headline CPI (consumer price index) rate in March. There is a big rethink happening now about when the Fed will be confident enough to cut interest rates, with more hopes slipping away from the June and September date increasingly being penciled in instead. US retail sales figures are out later today [Monday] are being watched closely for signs of continued consumer resilience.”
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Russ Mould, investment director at AJ Bell, said: “Oil prices had risen in anticipation of Iran’s action but have fallen back, although gold prices remain near record highs suggesting nervousness ongoing among investors. The situation remains difficult and, beyond the geopolitical and humanitarian implications, a wider conflict in the Middle East could see a surge in energy prices and the undoing of central banks’ cautious efforts to reduce inflation.
“For now, the FTSE 100 remains within reach of an all-time high.”
Meanwhile, gold remains in high demand among investors, amid the ongoing global turmoil. The price of gold, which hit a record high last week, was stable yesterday afternoon at $2,353.68 an ounce, compared to $2,397.12 at the previous close.
The FTSE-100 index at 3:45pm was down 20.78 at 7,974.80.
