European benchmarks edged lower Monday as fresh U.S.-Iran strikes pushed oil prices higher and reinforced expectations of an ECB rate hike this week. Asia-Pacific markets rallied instead, led by a tech-driven surge in South Korea and Japan. Novartis dragged Swiss stocks after a failed drug trial, while Germany's far-right AfD scored a state-election win over the weekend.
Europe drifts lower on oil and rate fears
The Stoxx 600 dipped almost 0.1% in morning trade. Germany's DAX led losses, sliding 0.14%, while the U.K.'s FTSE 100 fell 0.12%, France's CAC 40 lost 0.06%, and Italy's FTSE MIB gained 0.37%.
Investors weighed a stronger tech-led session in Asia overnight against another push higher in oil prices and hawkish central bank expectations. The ECB is widely expected to raise interest rates by 25 basis points on Thursday, with U.S. CPI data due Friday.
Asia-Pacific rallies as tech stocks surge
Japan's Nikkei 225 closed 2.12% higher at 66,399.84. South Korea's Kospi rose 4.61% to 6,995.39. Both gauges were lifted by broad gains in tech names, with Samsung and SK Hynix rising 5.68% and 8.26% respectively, and Japan's SoftBank advancing 11.22% and Advantest adding 4.20%.
Oil climbs as the Iran conflict drags on
Brent crude futures for November delivery rose 0.88% to $97.13 a barrel. U.S. WTI crude for October delivery gained 0.92% to $92.32. The gains came after the U.S. struck three Iranian oil tankers over the weekend. According to CNBC: "It may be simply destroying their capabilities to do it", Energy Secretary Chris Wright said, adding that an agreement may await Iran's next administration.
Higher oil prices have also stoked inflation concerns, reinforcing the case for further interest rate tightening in Europe.
Novartis slips, AfD wins German state vote
Switzerland's main index dropped 1.2%. Heavyweight Novartis fell 3.3% after its experimental drug pelacarsen missed a key goal in a late-stage trial. Over the weekend, Germany's far-right AfD topped state elections in Saxony-Anhalt with 44% of the vote, exit polls showed, dealing a blow to Chancellor Friedrich Merz. U.S. stock markets remained closed Monday for a holiday.
Sources: CNBC, Investing.com
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