STOXX 600 flat, FTSE 100 gains as oil surge, geopolitics weigh

European markets opened little changed on Monday, reflecting the cautious tone seen across global equities overnight.

The pan-European STOXX 600 was flat at 574.98 points in early trade, while the UK’s FTSE 100 edged 0.2% higher.

Across the region, sentiment remained subdued, with investors continuing to weigh the impact of rising oil prices and geopolitical risk.

The muted start followed declines across Asia-Pacific markets, where traders responded to heightened geopolitical uncertainty and a renewed move higher in crude prices.

With the conflict involving Iran entering its fifth week, European investors began the new week in a defensive mood, balancing external risks with key regional data releases due later in the day.

Markets open on a cautious footing

The early cash-session print suggests sentiment remained fragile rather than decisively risk-on at the start of the week.

The STOXX 600 was flat, while London outperformed slightly with a 0.2% gain, helped by strength in Rio Tinto.

Elsewhere in Europe, trading was subdued as investors digested the broader global risk backdrop.

The cautious tone came after Asia-Pacific markets traded lower overnight, reinforcing a global risk-off mood that carried into European hours.

Investors appeared reluctant to add exposure at the start of the week as uncertainty around geopolitical developments continued to dominate market positioning.

Investors watch global risk signals

Weekend developments in the Middle East kept risk appetite subdued across global markets.

US President Donald Trump said over the weekend that the US could seize Iran’s oil export hub at Kharg Island, a move that intensified concerns over the conflict’s impact on energy markets and regional stability.

At the same time, Yemen’s Houthi movement launched further attacks on Israel, widening the scope of the confrontation and adding to worries over broader regional instability and the safety of key energy routes.

Oil prices moved higher in early trading, with US crude rising above $102 a barrel and Brent pushing past $115.

For European markets, the rise in crude remains an important external factor, particularly for inflation-sensitive sectors such as transport, manufacturing and consumer goods.

Focus shifts to Europe data

Despite the fragile global backdrop, the regional macro calendar was expected to shape intraday moves.

Investors were set to monitor Germany’s latest inflation data, including CPI and HICP readings, for clues on how the energy shock may be feeding into price pressures across Europe’s largest economy.

A stronger-than-expected inflation reading from Germany may reinforce caution around rate expectations, while any signs of persistent price pressure could add to concerns over the region’s growth-inflation trade-off.

G7 meeting adds to market attention

Also on investors’ radar was an emergency virtual meeting of G7 finance ministers, energy ministers and central bank governors.

The talks underscored continued concern around energy security, supply-chain disruption and rising costs as the conflict entered a new phase.

For Europe, any coordinated messaging around energy security or inflation management may influence sector performance through the session.