London pre-open: Stocks seen flat despite escalating Middle East tensions

London stocks were set for a steady open on Monday despite escalating tensions in the Middle East.
The FTSE 100 was called to open flat at 8,851.

Danske Bank said: "Fighting between Israel and Iran enters its fourth day with continuous air assaults from both sides. Over the weekend, the conflict continued to escalate. Israel expanded its bombardment to target Iranian energy facilities while continuing to attack nuclear sites and residential areas. Iran's retaliation similarly targeted Israel's military and energy infrastructure. Both sides have suffered civilian casualties.

"The expansion of the warfare to include critical energy infrastructure heightens the risks for global energy markets even if the attacks thus far have not affected global supply."

Away from geopolitics, all eyes will be on central bank policy announcements this week, with decisions due from the Bank of Japan on Tuesday, the Federal Reserve and Riksbank on Wednesday and Norges Bank, the Bank of England and the Swiss National Bank on Thursday.

"We expect all but the SNB to stay on hold and expect the SNB to cut the rate 25bp to 0%," Danske said.

Investors will also be mulling the latest house price index from Rightmove released earlier, which showed that house prices eased in June following stronger-than-expected growth in April and May.

Prices eased by 0.4% in June, compared to a 0.6% uplift in May and April's 1.4% jump. The average asking price is now £378,240.

Rightmove said the fall was unusual for June. The average June increase has been 0.4% over the last ten years.

However, it noted that the dip followed "stronger-than-expected price growth in April and May, and appears to be part of a delayed response to increased stamp duty tax".

Changes to stamp duty thresholds came into effect in April, causing a rush of sales as people hurried to complete ahead of the deadline.

Agreed sales were 6% higher year-on-year in June, the highest number of sales agreed in any month since March 2022.

Rightmove's Colleen Babcock said: "It appears that we're now seeing the decade-high level of homes for sale, and the recent stamp duty increases in England, have a delayed impact on new sellers' pricing.

"Agents have been telling us that sellers need to set a competitive price to have a better chance of finding a buyer in the current market, and it looks like many are listening and responding to that message.

"Such realistic pricing will remain key in the coming months."

Year-on-year, house prices rose 0.8% in May.

In corporate news, gambling and sports betting group Entain upgraded its guidance for BetMGM following a strong first half from the US division.

The company, which owns a 50% share of BetMGM with MGM Resorts, said net revenue growth in the second quarter so far was consistent with the 34% year-on-year surge seen in the first three months of the year.

As a result, BetMGM revenues are expected to be "at least $2.6bn", up from the previous $2.4bn-2.5bn range and the $2.1bn generated last year.

Elsewhere, consulting and engineering firm Wood Group and its joint venture partner, Tendrill International, said they have secured a five-year contract with Brunei Shell Petroleum for brownfield engineering, procurement, and construction services.

Under the contract, the TendrillWood JV will deliver integrated, end-to-end brownfield EPC projects across Brunei Shell Petroleum's offshore and onshore assets.