FTSE 100 to rise despite Middle East tension

12. Oct 2026

(AWP Alliance News) - Stocks in London are set to open higher on Monday, despite dramatic events in the Middle East over the weekend, before eyes turn to a US inflation reading later in the week.

IG says futures indicate the FTSE 100 to open 28.3 points higher, 0.3%, at 10,580.35 on Monday. The index of London large-caps ended up 110.45 points, 1.1%, at 10,552.05 on Friday. It added 0.9% last week.

In China, the Shanghai Composite was down 0.2% on Monday. In Hong Kong, the Hang Seng Index was up 0.2%. In Sydney, the S&P/ASX 200 was 0.8% higher. Financial markets in Tokyo are closed on Monday.

The US observes Columbus Day on Monday. The Securities Industry & Financial Markets Association in the US has recommended a Treasury market closure on Monday as a result. Equities will trade as normal.

Last week, the 10-year US Treasury yield topped 5.36% and the 30-year spiked above 5.73%, levels not seen since 2002.

Sterling rose to USD1.3239 on Monday, from USD1.3233 at the time of the London equities close on Friday. Against the euro, the pound faded to EUR1.1813 from EUR1.1818.

The single currency fetched USD1.1203, up from USD1.1195. Versus the yen, the buck was steady at JPY158.36.

Brent fell to USD103.61 a barrel, from USD104.86 late Friday afternoon, though events in the Middle East remain in focus. The North Sea benchmark had traded above USD105 earlier on Monday.

A fresh Houthi strike hit Riyadh's international airport on Sunday, a day after an attack claimed by the Yemeni group killed at least a dozen people and forced authorities to suspend operations there.

Saturday's attack, the deadliest on Saudi soil in more than a decade, was a sharp escalation in the Yemen war, where Riyadh has long militarily supported the internationally recognised government against the Houthis.

SPI Asset Management analyst Stephen Innes commented: "The market is no longer paying full geopolitical premium on every headline, and that is probably the most useful signal in the morning price action. A strike matters if it threatens real barrels, shipping lanes, refining capacity or insurance costs; otherwise, the market is getting increasingly reluctant to pay up simply because the geopolitical ticker flashes red. That is why the retreat in crude is more important than the opening spike."

US President Donald Trump said Saturday he would soon decide whether to join Saudi strikes against Iran-backed Houthis after the attack on Riyadh's international airport.

"We may. We're going to look at it. We just found out about the recent attack, so we'll make a decision," Trump told reporters at the White House. "We move very quickly."

In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.8%, the S&P 500 up 0.6% and the Nasdaq Composite up 0.6%.

Analysts at Rabobank commented: "US and European equity indices were firmly in the black on Friday as the recent run up in bond yields took a breather.

"The yield on French 10-year bonds fell by 4.2bps to close the week slightly lower. That helped to propel the CAC40 to a 0.95% gain on Friday, with ArcelorMittal, Capgemini, L'Oreal, Hermes, and Renault among the most prolific gainers. Renault shares got a boost from news that the EU will enact a 350,000 quota against imports of Chinese hybrid and plug-in hybrid vehicles, above which much steeper tariffs will kick in."

China and the EU can avoid "escalation" in various contentious disputes, Beijing said on Saturday, as worries of a damaging trade war simmer.

Discussions last week in Beijing between Chinese Commerce Minister Wang Wentao and EU counterpart Maros Sefcovic were "successful" and marked "a new starting point", China's commerce ministry said in an online statement.

"The outcomes and consensus reached by both sides fully demonstrate that China and the EU have both the willingness and the wisdom to manage and properly handle differences through dialogue and consultation, and to effectively avoid escalation of frictions," it said.

Gold fell to USD4,186.11 an ounce early Monday, from USD4,189.88 at the time of the London equities close on Friday.

Speeches are expected from Bank of England Deputy Governor Sarah Breeden as well as Catherine Mann, a member of the BoE's Monetary Policy Committee on Monday in an otherwise quiet economic calendar.

On the corporate front, recruiter Hays releases a trading statement.

By Eric Cunha, Alliance News news editor

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