23rd Mar 2026 07:00
(Alliance News) - Stocks in London are set to open sharply lower on Monday after US President Donald Trump issued an ultimatum to Iran over the Strait of Hormuz, heightening fears of further escalation in the Middle East and disruption to global energy supplies.
IG says futures indicate the FTSE 100 to open 116.8 points lower, 1.2%, at 9,801.53 on Monday. The index of London large-caps closed 1.4% down at 9,918.33 on Friday.
Iran has threatened to completely close the Strait of Hormuz if the US attacks its energy infrastructure, following an ultimatum issued by US President Donald Trump. Tehran also warned it would target key infrastructure across the Middle East if Trump follows through on his vow to "obliterate" the Islamic republic's power plants unless the strait is swiftly reopened.
Trump wrote on Truth Social that the US would "hit and obliterate" Iranian power plants "starting with the biggest one first" if Tehran did not fully reopen the strait within 48 hours, or 2344 GMT on Monday based on the timing of his post.
Iran's defiant response came after its missiles breached air defences and struck two towns in southern Israel, including one housing a nuclear facility, highlighting Tehran's continued ability to retaliate as the war entered its fourth week.
Prior to this, Trump said on Friday he was considering "winding down" military operations against Iran, as the US temporarily eased sanctions on Iranian oil shipments to ease a global supply crunch.
Brent oil was trading at USD113.47 a barrel early Monday, higher than USD109.78 late Friday.
An energy boss has warned that price rises may be "inescapable" if the Middle East conflict drags on, as the UK government insisted there is no need to ration fuel. UK Housing Minister Steve Reed said contingency plans are in place but urged consumers to "buy their fuel just like they always would".
On Sunday, Centrica Chief Executive Chris O'Shea said global oil supplies have fallen by 20% due to the conflict. Speaking to the BBC, he said: "Cornwall Insight, I think, have predicted that there's going to be an increase in prices. If it stays as it is then I think that's inescapable. The world uses about 100 million barrels of oil a day. We've lost about 20% of that through the Strait of Hormuz."
Sterling was quoted at USD1.3292 early Monday, lower than USD1.3323 at the London equities close on Friday. Against the euro, sterling rose to EUR1.1531 from EUR1.1526 a day prior.
The euro traded at USD1.1524 early Monday, lower than USD1.1527 late Friday. Against the yen, the dollar was quoted at JPY159.56 versus JPY159.20.
Ipek Ozkardeskaya, senior analyst at Swissquote, said: "We woke up to another rough week this morning after a weekend that failed to ease tensions in the Middle East.
"One interesting shift: markets are reacting less to Trump's announcements-tweets and interviews alike-as the US is increasingly isolated in this conflict, with Western allies reluctant to step in. At the same time, the narrative is no longer fully in Washington's hands, with Iran now shaping expectations and narrative on the ground. TACO hopes are fading."
The head of the International Energy Agency warned that no country is insulated from the disruption to oil flows, cautioning that the world could be heading towards an energy crisis more severe than that seen in the 1970s.
In the US on Friday, Wall Street ended lower, with the Dow Jones Industrial Average down 1.0%, the S&P 500 down 1.5% and the Nasdaq Composite down 2.0%.
In Asia on Monday, equities were firmly in sell-off mode as tensions in the Middle East escalated. The Nikkei 225 index in Tokyo was down 3.4%.
In China, the Shanghai Composite was down 3.5%, while the Hang Seng index in Hong Kong fell 4.0%.
Meanwhile, China's Premier Li Qiang said the country is willing to help expand the global "trade pie" by further opening up its economy, while criticising unilateralism from certain nations. Speaking to business executives in Beijing, Li said China "will steadfastly advance high-level opening up, import more high-quality foreign goods, and work alongside all parties to promote the optimised and balanced development of trade", according to state media.
The S&P/ASX 200 in Sydney closed down 0.7%.
Gold was quoted at USD4,197.45 an ounce early Monday, lower than USD4,593.70 on Friday.
In Monday's corporate calendar, among those reporting are Applied Nutrition, Blackbird, Partners Group Private Equity and Pennant International, all publishing full year or half year results.
In the economic calendar on Monday, Spain trade balance, Ireland producer prices and eurozone consumer confidence are due.
By Eva Castanedo, Alliance News reporter
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