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Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

London open: Israel-Iran tensions weigh on stocks early on

(Sharecast News) - Iran's attack on Israel overnight was weighing on London's stock market on Monday morning, with the FTSE 100 dropping 0.4% to 7,960 early on. "Escalating tensions in the Middle East cast a shadow over sentiment," said Richard Hunter, head of markets at Interactive Investor.

"Apart from the human cost, this has separate implications for economies, where supply shocks and a rising oil price bring further inflationary pressures at a time when central banks are edging towards the final leg of getting inflation down to target levels."

In a retaliation for a strike on the Iran consulate in Damascus, Iran launched more than 300 drones and missiles at Israel on Sunday evening, though nearly all were intercepted by air defence operations with the help from US, UK, France and Jordan.

Markets will now be watching how Israel responds. The US has warned Israel that it would not join in with any retaliatory action, while UN secretary general Antonio Guterres urged for "maximum restraint", adding: "Now is the time to defuse and de-escalate. Neither the region nor the world can afford more war."

In other macro news, Monday's economic data schedule looked relatively light, with Eurozone industrial production and US retail sales the only major releases of the day.

Market movers

Airlines easyJet and IAG were the best performers on the FTSE 100 after the impact from Middle Eastern geopolitics on oil prices wasn't as bad as feared. Brent crude, having risen sharply after the past month, was down 1.1% at $89.49 a barrel on Monday morning. As a result, energy producers BP and Shell were both in the red.

Also lower was Fresnillo, the precious metals producer, with investors taking profits after the stock had soared by a third over the past month on the back of record gold prices. Others in the sector, such as Hochschild and Endeavour, were also out of favour.

B&Q and Screwfix owner Kingfisher slipped after revealing that chair Andrew Cosslett will step down after seven years at the helm of the board.

PageGroup shares dropped 5% after the recruitment firm posted lower first-quarter gross profit as the economic slowdown continued to hit the jobs market. Gross profit for the first three months of the year fell 12.9% to £219.7m on an annual basis, with UK and Asia-Pacific operations down 19.2% and 22% respectively.

Shares in Inchcape raced 4% ahead after the car dealer announced the disposal of its UK Retail operations to Group 1 Automotive UK for £346m, and unveiled plans to return £100m to shareholders by way of a buyback programme.

Market Movers

FTSE 100 (UKX) 7,960.03 -0.44% FTSE 250 (MCX) 19,687.30 -0.17% techMARK (TASX) 4,456.71 -0.28%

FTSE 100 - Risers

easyJet (EZJ) 538.00p 2.09% International Consolidated Airlines Group SA (CDI) (IAG) 165.20p 1.57% Prudential (PRU) 716.00p 1.36% Beazley (BEZ) 662.50p 1.30% Melrose Industries (MRO) 651.40p 1.18% NATWEST GROUP (NWG) 277.70p 1.17% DCC (CDI) (DCC) 5,625.00p 0.99% Lloyds Banking Group (LLOY) 51.42p 0.86% Standard Chartered (STAN) 668.40p 0.84% Tesco (TSCO) 285.20p 0.81%

FTSE 100 - Fallers

Fresnillo (FRES) 606.00p -2.65% BP (BP.) 525.10p -2.60% Croda International (CRDA) 4,684.00p -1.56% Shell (SHEL) 2,895.50p -1.41% Ocado Group (OCDO) 351.80p -1.37% United Utilities Group (UU.) 1,001.00p -1.33% Pershing Square Holdings Ltd NPV (PSH) 4,028.00p -1.32% Entain (ENT) 811.00p -1.19% Ashtead Group (AHT) 5,728.00p -1.17% Vodafone Group (VOD) 66.44p -1.16%

FTSE 250 - Risers

Mitie Group (MTO) 118.00p 5.73% W.A.G Payment Solutions (WPS) 69.00p 4.23% Inchcape (INCH) 725.50p 3.87% Crest Nicholson Holdings (CRST) 195.00p 3.34% Ibstock (IBST) 153.60p 2.13% Coats Group (COA) 81.40p 2.01% TR Property Inv Trust (TRY) 320.00p 1.91% QinetiQ Group (QQ.) 358.40p 1.82% Bakkavor Group (BAKK) 117.50p 1.73% TBC Bank Group (TBCG) 3,125.00p 1.63%

FTSE 250 - Fallers

Pagegroup (PAGE) 460.00p -5.00% Endeavour Mining (EDV) 1,777.00p -3.58% Vietnam Enterprise Investments (DI) (VEIL) 581.00p -3.33% Hays (HAS) 93.35p -3.26% Hochschild Mining (HOC) 144.60p -3.21% Diversified Energy Company (DEC) 1,092.00p -3.11% Harbour Energy (HBR) 290.00p -1.99% Fidelity Emerging Markets Limited Ptg NPV (FEML) 662.90p -1.89% Impax Environmental Markets (IEM) 390.00p -1.89% Pets at Home Group (PETS) 274.60p -1.79%

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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