1st Sep 2026 06:59
(Alliance News) - Stocks in London are set to open marginally higher on Tuesday as investors weigh renewed tensions between the US and Iran alongside a fresh batch of manufacturing data and UK inflation indicators.
IG says futures indicate the FTSE 100 to open up 0.6 points, marginally higher, at 10,824.86 on Tuesday. The index of London large-caps closed 0.3% higher at 10,824.26 on Friday.
Financial markets in the UK were closed on Monday for the Summer Bank Holiday.
Brent oil was trading at USD90.84 a barrel early Tuesday, higher than USD90.33 late Monday.
US President Donald Trump threatened to hit Iran "hard" after the two countries exchanged fire for the first time in more than a month, while Iran's president warned that further fighting with the US was not in the country's interest.
After six months of conflict, the two sides remain at an impasse, with Iran keeping the Strait of Hormuz closed and the US maintaining a naval counter-blockade of Iranian ports.
Late on Sunday, the US said it had carried out strikes on an Iranian island in the Strait of Hormuz.
Tehran quickly retaliated by attacking US military targets in the Middle East, raising fears of a
renewed escalation in hostilities.
"We're going to hit them hard," Trump said, according to a Fox News reporter who briefly spoke to the president. "There will be a response."
Sterling was quoted at USD1.3547 early Tuesday, marginally lower than USD1.3548 late Monday. Against the euro, sterling rose to EUR1.1670 from EUR1.1662.
The euro traded at USD1.1609 early Tuesday, lower than USD1.1617 late Monday. Against the yen, the dollar was quoted at JPY159.87 versus JPY159.75.
Back in the UK, shop price inflation accelerated to its highest level in two years in August, according to the British Retail Consortium and NielsenIQ.
The shop price index rose 1.5% on-year in August, quickening from 0.9% in July. Non-food inflation accelerated to 0.9% from 0.2%, while food inflation picked up to 2.8% from 2.2%. Fresh food inflation eased slightly to 3.0% from 3.1%, but ambient food inflation jumped to 2.5% from 1.1%.
In the US on Monday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.7%, the S&P 500 down 0.3% and the Nasdaq Composite down 0.1%.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was down 0.1%.
Japanese Finance Minister Satsuki Katayama said she had not discussed higher interest rates with US Treasury Secretary Scott Bessent, despite his recent comments that Tokyo should take steps to support the yen.
Following their meeting on the sidelines of the G20 finance gathering in North Carolina, Katayama said the pair agreed that "an orderly market for the yen is indispensable for the stability of global financial markets" and that continued coordination between Japan and the US would help achieve that objective.
In China, the Shanghai Composite rose 0.1%, while the Hang Seng index in Hong Kong fell 1.0%.
China's manufacturing activity strengthened in August, with new orders increasing for a 15th consecutive month, S&P Global reported.
The RatingDog China manufacturing purchasing managers' index rose to 51.5 in August from 50.9 in July. A reading above 50 indicates expansion in activity.
The S&P/ASX 200 in Sydney was down 0.1%.
Gold was quoted at USD4,443.13 an ounce early Tuesday, higher than USD4,427.90 on Monday.
In Tuesday's corporate calendar, Ashtead Technology Holdings, Bunzl and Michelmersh Brick Holdings report half-year results.
In the economic calendar on Tuesday, the UK releases Nationwide house price data.
Germany publishes retail sales, while manufacturing PMI readings are due from Germany, the eurozone, the UK and the US. The eurozone also releases inflation and unemployment data.
By Eva Castanedo, Alliance News senior economics reporter
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