(Alliance News) - London's FTSE 100 is set to tread water on Monday, following a sharp decline at the end of last week, as investors continue to keep on eye on developments in the Middle East.
It is also a key week on the data and central banking calendar. There is UK unemployment data and a slew of flash purchasing managers' index readings due on Tuesday, an interest rate decision from the European Central Bank on Thursday before a US gross domestic product reading on the same day.
IG says futures indicate the FTSE 100 to open down 0.5 of a point at 7,401.64 on Monday. The index of London large-caps closed down 97.39 points, 1.3%, at 7,402.14 on Friday.
The FTSE 100 last week lost 3.2%, as tensions in the Middle East heated up.
Over the weekend, Israel's Defence Minister Yoav Gallant said he expects that fighting could last for months in the war against the Islamist Hamas in the Gaza Strip.
"In terms of the operational aspects of manoeuvring - at the end of the day, nothing will stop the IDF. It is a combination of two things - our aerial capabilities and ground manoeuvring," Gallant said on Sunday in Tel Aviv.
A ground offensive by the Israeli military in the Gaza Strip could be imminent following Hamas' terrorist attack on Israel just over two weeks ago.
Meanwhile, the Pentagon moved to step up US military readiness in the Middle East in response to what it said were "recent escalations by Iran and its proxy forces" across the region. US Secretary of Defense Lloyd Austin ordered the activation of air defence systems and notified additional forces that they may be deployed soon.
Away from the war, the US budget deficit for the past year widened to USD1.7 trillion, government data showed, in a development that could add pressure on President Joe Biden as he seeks reelection in 2024.
The deficit expanded by USD320 billion for the fiscal year ending September 30, following a drop in tax revenues and lower deposits of earnings by the Federal Reserve on the back of higher interest rates.
Sterling was quoted at USD1.2151 early Monday, lower than USD1.2156 at the London equities close on Friday. The euro traded at USD1.0577 early Monday, lower than USD1.0594 late Friday. Against the yen, the dollar was quoted at JPY149.94, up versus JPY149.84.
In the US on Friday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.9%, the S&P 500 losing 1.3% and the Nasdaq Composite shedding 1.5%.
In Asia on Monday, the Nikkei 225 index in Tokyo was down 0.5%. In China, the Shanghai Composite was down 1.1%. The S&P/ASX 200 in Sydney was down 0.8%.
In Hong Kong, financial markets are closed for Chung Yeung Festival public holiday.
Gold was quoted at USD1,975.33 an ounce early Monday, lower than USD1,996.01 on Friday. Brent oil was trading at USD91.11 a barrel early Monday, lower than USD93.20 late Friday.
In Monday's UK corporate calendar, there are trading statements from Shanta Gold and South32.
By Sophie Rose, Alliance News reporter
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