Key facts
- The FTSE 100 index was down 0.1% to 10,824.74 points.
- Energy shares like BP and Shell gained around 1% each.
- US nonfarm payrolls rose by 162,000 in August, increasing bets on a Fed rate hike.
- Bank of England deputy governor Clare Lombardelli warned of potential interest rate rises.
- Vistry slashed profit forecasts due to ballooning losses.
Global stock markets traded mixed on Monday, with rising oil prices and increased expectations of a US Federal Reserve rate hike influencing investor sentiment. The pan-European Stoxx 600 index slipped nearly 0.1%, with Germany's DAX down 0.14% and France's CAC 40 and Italy's FTSE MIB each gaining about 0.1%. London's FTSE 100 fell 0.1% to 10,824.74 points by 0927 GMT, with consumer-focused sectors leading losses. Energy shares, including BP and Shell, provided support, gaining around 1% each due to higher crude prices. Standard Life rose 1.5% after its first-half profit exceeded market expectations, while Ashmore fell 1.4% after its annual profit missed forecasts. Spire Healthcare gained approximately 3% following an agreement for a takeover valued at about EUR 1.03 billion.
In the US, traders increased their bets on a September Federal Reserve rate hike following a stronger-than-expected US nonfarm payrolls report, which showed an increase of 162,000 jobs against an expected 56,000. The unemployment rate held steady at 4.1%. Ole Hansen of Saxo Bank noted that gold found buying interest below USD 4,400, with resistance above USD 4,500, and that stronger employment data reinforced expectations of a Fed rate hike on September 16.
Oil prices remained elevated, near six-week highs, due to further US-Iran hostilities affecting shipping around the Strait of Hormuz. Iran also announced plans for a new restricted zone in the Gulf and a shipping corridor. US Energy Secretary Chris Wright expressed doubts about a near-term nuclear agreement with Iran, suggesting it might await the next administration. Higher energy costs are adding pressure to inflation expectations globally, prompting markets to monitor their potential impact on central bank decisions.
Asian markets mostly advanced, with South Korea's Kospi jumping 4.61% and Japan's Nikkei 225 gaining 2.12%. Mainland China's CSI 300 rose 0.59%, and Australia's S&P/ASX 200 edged 0.06% higher. Hong Kong's Hang Seng fell around 0.9%. US stock exchanges were closed for Labor Day, with trading set to resume on Tuesday.