[1/2]The chart of the German stock price index DAX is displayed on the stock exchange in Frankfurt, Germany, October 13, 2023. REUTERS/Staff/File Photo Acquire license rights
LONDON, Oct 16 (Reuters) - Markets showed signs of a slight recovery in confidence on Monday, as European stock indices rose and oil prices stabilised, but traders continued to watch cautiously for any signs of an escalation in the war. between Israel and Hamas.
Israeli Prime Minister Benjamin Netanyahu promised on Sunday "Demolish Hamas" as his troops prepared to advance into the Gaza Strip in search of Hamas militants whose deadly attack on October 7 killed 1,300 people in the worst attack on civilians in Israel's history.
Oil prices rose last week as investors priced in the possibility of a rally in the world's top oil-producing region, while prices of US Treasuries and gold rose as traders bought safe-haven assets.
The merchants are wait to see if the conflict spreads to other countries, which would drive up oil prices even further and deal a new blow to the global economy.
They are keeping a special eye on Iran, which said Sunday that its military would not engage militarily with Israel as long as Israel does not attack it, its interests or its citizens.
At 1120 GMT, the MSCI World Equity Index was down 0.1% on the day. (.MIWD00000PUS). European stock indices rose, with the STOXX 600 up 0.2% (.STOXX) and London's FTSE 100 rises 0.4% (.FTSE).
Oil prices fell but were still above $90 a barrel after the increase last week.
The outlook for Wall Street looked uncertain, with Nasdaq futures stable and S&P 500 futures up 0.3%.
"What the market will look for to improve the mood would be any kind of reduction in tension... and, on the negative side, any sense that oil-rich nations are going to be involved would be a catalyst to boost stocks." . lower," said Fiona Cincotta, senior markets analyst at City Index.
"Any additional comments from Iran will be very prominent."
Senior US officials warned on Sunday that the war could escalate into a broader conflict throughout the Middle East.
Secretary of State of the United States of America Antonio Blinken He arrived in Israel on Thursday and has also been to Qatar, Jordan, Bahrain, the United Arab Emirates, Saudi Arabia and Egypt in a bid to limit the spread of the conflict.
Before the Hamas attack, market sentiment had been buoyed by the global economy and the idea that the U.S. Federal Reserve planned to keep rates high for longer.
This narrative, along with the company's earnings this week, has become secondary to geopolitical concerns, Cincotta said.
Benchmark 10-year U.S. Treasury yields rose to 4.7018%, after falling more than 8 basis points on Friday amid demand for bond safety.
European government bond yields rose after European Central Bank officials reiterated concerns about inflation. The German 10-year yield rose 6 basis points to 2.788%.
He American dollar The index fell slightly, down 0.1% on the day to 106.470. The euro rose 0.2% to $1.053.
The shekel of Israel fell to its lowest level in more than eight years.
Gold pared some of Friday's $63 gain, falling 0.9% to $1,914.7 an ounce.
"Ultimately, gold and oil prices are the most sensitive expressions of the risks of the (Gaza) conflict," Kyle Rodda, senior financial markets analyst at Capital.com, wrote in a note.
However, "identifying potential hotspots and play scenarios is a big challenge," Rodda said.
Reporting by Elizabeth Howcroft in London, additional reporting by Kevin Buckland in Tokyo; edited by David Evans and Jan Harvey
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