9th Mar 2026 06:56
(Alliance News) - Stocks in London are set to open lower on Monday, as escalating conflict in the Middle East sends oil prices sharply higher and global equities retreat.
IG says futures indicate the FTSE 100 to open 80.4 points lower, 0.8%, at 10,203.85 on Monday. The index of London large-caps closed down 1.3% at 10,284.75 on Friday.
Brent oil was trading at USD108.95 a barrel early Monday, jumping from USD90.85 late Friday, amid intensifying turmoil following US and Israeli strikes on Iran. Tehran has now named the son of the slain leader as its new supreme leader.
The ruling clerics appointed Ayatollah Mojtaba Khamenei as the country's new supreme leader, defying threats from the US and Israel to oppose him. Nine days after US-Israeli strikes killed the elder Ayatollah Ali Khamenei and plunged the Middle East into war, the clerical government's Assembly of Experts convened to choose their next leader.
Mojtaba Khamenei, 56, "is appointed and introduced as the third leader of the sacred system of the Islamic Republic of Iran, based on the decisive vote of the respected representatives of the Assembly of Experts", the clerical body said in a statement. It said that the clerical body "did not hesitate for a minute" in choosing a new leader, despite "the brutal aggression of the criminal America and the evil Zionist regime".
US President Donald Trump dismissed the younger Khamenei as a "lightweight" previously, and insisted again that he should have a say in the new leader's appointment. "If he doesn't get approval from us he's not going to last long," he told ABC News before the announcement was made.
But Tehran's Foreign Minister Abbas Araghchi said that the decision was Iran's alone, adding it would "allow nobody to interfere in our domestic affairs".
Since the beginning of the war, the West Texas Intermediate is up more than 75% and Brent more than 60%. Attacks on oilfields were reported in southern Iraq and in the northern autonomous Kurdistan region, which forced a US-run oilfield to cease production, while the United Arab Emirates and Kuwait have started reducing output.
Ipek Ozkardeskaya, senior analyst at Swissquote, said the appointment of Mojtaba Khamenei signals that Iran is unlikely to back down.: "The choice suggests that Iran will not back down to the US, and that means a potentially prolonged war in the Middle East – which is home to about 50% of global oil reserves and around 40% of the world's natural gas reserves. About 20% of the world's oil and LNG flows through the Strait of Hormuz, which is presently closed, making it one of the most critical energy chokepoints in the global economy."
She added: "Oil prices will reach a peak at some point – maybe they already have, maybe there's more to come – but they are likely to fluctuate at elevated levels for weeks, perhaps months. Eventually – even if the war persists – energy prices will likely come down. But during this period, high energy prices will revive inflation globally and weigh notably on growth."
Meanwhile, Trump threatened to escalate the bombing campaign as Iranian President Masoud Pezeshkian vowed that the country would never surrender, despite fresh waves of US and Israeli air strikes that set a Tehran airport ablaze. Israel confirmed some of the largest raids since the aerial bombardment of Iran began last Saturday, targeting a military academy, an underground command centre and a missile storage facility.
Sterling was quoted at USD1.3327 early Monday, lower than USD1.3387 at the London equities close on Friday.
The euro traded at USD1.1559 early Monday, lower than USD1.1597 late Friday. Against the yen, the dollar was quoted at JPY158.51 versus JPY157.62.
In the US on Friday, Wall Street ended deep in the red, with the Dow Jones Industrial Average down 1.0%, the S&P 500 down 1.3% and the Nasdaq Composite down 1.6%.
The sell-off extended into Asia on Monday, with the Nikkei 225 index in Tokyo down 5.1%.
In China, the Shanghai Composite was down 0.6%, while the Hang Seng index in Hong Kong was down 1.6%.
China's consumer price inflation accelerated in February as producer price deflation eased, official data showed.
According to the National Bureau of Statistics of China, the consumer price index rose 1.3% year-on-year in February, accelerating from a 0.2% increase in January and surpassing the 0.8% rise consensus forecast cited by FXStreet.
February's inflation is the highest since January 2023, mainly driven by the week-long Lunar New Year holiday.
The S&P/ASX 200 in Sydney closed down 2.9%.
In the US, Court of International Trade judge Richard Eaton granted the Trump administration 45 days to design a tariff-refund system after ruling that companies are owed repayments for tariffs imposed under the International Emergency Economic Powers Act.
In February, the US Supreme Court ruled that the Trump administration's tariffs introduced under the IEEPA were illegal. In a separate order earlier this week, Eaton instructed US Customs & Border Protection to stop calculating the disputed tariffs for imports where payments had not yet been finalised and to begin issuing refunds.
CBP executive director of trade programs Brandon Lord said a new system would be needed, noting that existing administrative procedures and technology were not suited to a task of that scale.
"Its existing administrative procedures and technology are not well suited to a task of this scale and will require manual work that will prevent personnel from fully carrying out the agency's trade enforcement mission," Lord said in a filing.
Gold was quoted at USD5,126.60 an ounce early Monday, lower than USD5,142.35 on Friday.
In Monday's corporate calendar, Clarkson and HgCapital Trust publish full year results.
In the economic calendar on Monday, Germany industrial production and US consumer inflation expectations are due.
By Eva Castanedo, Alliance News reporter
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