European stocks mixed amid rising tensions in Middle East

The German Dax was down 0.34%, Italy’s FTSE Mib was down 0.08%, Spain’s Ibex 35 was flat and France’s Cac 40 gained 0.03%

European stocks were trading mixed on Monday, as traders digested rising tensions in the Middle East.

The German Dax was down 0.34% by 9:55?am GMT, while Italy’s FTSE Mib was down 0.08%. Spain’s Ibex 35 was flat and France’s Cac 40 bucked the trend to gain 0.03%. U.K. markets are shut Monday for a national bank holiday.

It comes as fears of a wider conflict in the Middle East pushed oil prices higher.

Brent crude gained 1.04% to trade around $79.84, while U.S. West Texas Intermediate (WTI) crude was up 1.1% at $75.65 a barrel.

While market expectations are centred on Iran’s attack hurting Israel without triggering a wider regional conflict, Israel’s response will be equally important. And Israel’s response may include an attack on Iran’s oil supply and related infrastructure, which would put at risk 3 - 4% of global oil supply, Vivek Dhar, mining and energy commodities strategist at the Commonwealth Bank of Australia, told CNBC.

Last week, the pan-European Stoxx 600 tracked U.S. markets higher, closing the week firmly in positive territory, up 1.3%.

On Monday, U.S. stock futures were little changed after Jerome Powell, chair of the U.S. Fed, last week indicated that interest rate cuts were near. Although he was not specific about when the first cut might take place, the CME Group’s FedWatch Tool shows that traders unanimously expect a reduction at the Fed’s next meeting on September 18.

In the Asia-Pacific region, meanwhile, markets were mixed.

Back in Europe, Germany’s Ifo survey showed that business sentiment fell in August, suggesting that the country’s economy remains in the doldrums. The Ifo Business Climate Index declined to 86.6 points in August from 87.0 points the previous month.

The German economy is increasingly falling into crisis, the institute said on X.