European stocks seen lower as US-Iran tensions fuel safe haven buying

European stocks seen lower as US-Iran tensions fuel safe haven buying

European stocks are set to open lower on Monday, as investors monitor rising tensions between the United States and Iran.

Britain’s FTSE 100 is seen falling 34 points to 7,580, Germany’s DAX slumping 110 points at 13,092, and France’s CAC dropping 43 points to 5,983, according to IG index data.

Market players are fleeing riskier assets like equities in favor of safer alternatives like gold and bonds after a U.S. airstrike last week killed Iran’s top military commander, Qasem Soleimani, in Iraq. The attack has heightened already-volatile relations between Washington and Tehran.

Oil is also surging on the back of intensifying U.S.-Iran tensions, amid fears it could disrupt supply in the Middle East. Brent crude futures were up 2.3%, or $1.56, at $70.16 a barrel at 6:46 a.m. London time. U.S. West Texas Intermediate (WTI) crude futures climbed 2%, or $1.25, to $64.31.

Over the weekend, Iraq’s parliament passed a resolution calling for the government to expel foreign troops from the country. President Donald Trump responded by threatening to impose sanctions on Iraq. Meanwhile, Iran has declared it will no longer adhere to uranium enrichment restrictions agreed under the 2015 nuclear deal.

In Asia, markets mostly fell with Japan leading the losses. The Nikkei 225 dived 1.9% while MSCI’s broadest index of Asia-Pacific shares excluding Japan slipped 1%.

Back in Europe, Spanish Socialist leader Pedro Sanchez failed to secure parliament backing to form a government. He’ll have another chance on Tuesday, when another vote will be held in which he only requires a simple majority.

In terms of data, German retail sales for November and euro zone composite PMI (purchasing managers’ index) for December are due to be released later this morning.

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