The FTSE 100 edged higher on Monday in tentative trade as investors awaited further geopolitical developments and geared up for the US earnings season.
The FTSE 100 was up 0.3% to 7,624 at the time of writing on Monday.
“A mute start to the week for European indices suggests a sense of nervousness, particularly as the US reporting season gets underway and investors worry about a cautious tone in corporate outlooks,” said Russ Mould, investment director at AJ Bell.
“The FTSE 100 was flat…with strength in retail and mining stocks offset by weakness in pharmaceuticals amid negative read-across from Pfizer’s weak update.”
Investors are preparing for earnings updates from US companies including Tesla, Netflix, Goldman Sachs and Morgan Stanley this week.
Geopolitical risks
Natural resources companies were among the FTSE 100 top gainers on Monday as the human tragedy in the Middle East supported commodity prices.
“As risk-off sentiment has been spreading, investors have been seeking more defensive positions amid fears of conflict escalating in the Middle East,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“Investors are braced for volatility ahead amid fears that Hezbollah militants could attack Israel over its operations in Gaza as forces ready for invasion.”
BP and Shell added a significant number of points to the FTSE 100.
St James’s Place was the top riser, up 3%, with a small bounce back from Friday’s crash.
Ocado shares were down 5.3% at the time of writing on Monday and were the biggest faller.
“Ocado fell after a broker downgrade on the stock, citing concerns about delays to rolling out new fulfilment centres and competition for warehouse automation systems intensifying,” said Mould.