The Euronext NV stock exchange in Paris.
Nathan Laine | Bloomberg | Getty Images
LONDON — European stocks were tradings in mixed territory on Monday, as traders digested rising tensions in the Middle East following strikes by both Israel and Hezbollah over the weekend.
The German Dax was 0.22% lower by 9:20 a.m. London time, while Spain’s Ibex 35 was down 0.1% and Italy’s FTSE Mib was broadly flat. France’s Cac 40 bucked the trend to rise 0.19% and U.K. markets are closed Monday for a national bank holiday.
It comes as fears of a wider conflict in the Middle East pushed oil prices higher. Over the weekend, more than 100 Israeli fighter jets hit Lebanese targets, and Iran-backed Hezbollah fired more than 320 rockets into Israel.
Brent crude rose 1.1% to trade around $79.90, while U.S. West Texas Intermediate crude was 1.18% higher at $75.69 a barrel.
“While market expectations are centered on Iran’s attack hurting Israel without triggering a wider regional conflict, Israel’s response will be equally important. And Israel’s response may include an attack on Iran’s oil supply and related infrastructure, which would put at risk 3 – 4% of global oil supply,” Vivek Dhar, mining and energy commodities strategist at the Commonwealth Bank of Australia, told CNBC.
Last week, the pan-European Stoxx 600 tracked U.S. markets higher, ending the week firmly in positive territory, up 1.3%.
On Monday, U.S. stock futures were little changed after Jerome Powell, chair of the U.S. Federal Reserve, last week indicated that interest rate cuts were near. Although he was not specific about when the first reduction might take place, the CME Group’s FedWatch Tool shows that traders unanimously expect a cut at the Fed’s next meeting on Sept. 18.
In the Asia-Pacific region, meanwhile, markets were mixed.
Back in Europe, Germany’s Ifo survey showed that business sentiment fell in August, indicating that the country’s economy remains in the doldrums. The Ifo Business Climate Index fell to 86.6 points in August from 87.0 points the previous month.
“The German economy is increasingly falling into crisis,” the institute said on X.
Later in the week, euro zone inflation data is due to be released Friday and will be closely watched for hints as to whether to European Central Bank will cut rates further next month.
— CNBC’s Lim Hui Jie contributed to this report.