At the time of writing, Brent crude was down 0.91% at $79.12 a barrel, while US West Texas Intermediate (WTI) crude had fallen 0.70% to $75.32 a barrel.
Lower crude prices reflected broader investor sentiment in early trading after Qatari and Pakistani mediators said the first round of negotiations between the US and Iran aimed at securing a final agreement to end the conflict had concluded with "encouraging progress".
A memorandum of understanding signed last week includes a commitment to reach a final agreement within 60 days, an end to fighting on "all fronts" - including in Lebanon - and the reopening of the Strait of Hormuz.
UK prime minister steps down, dragging on the pound
In the afternoon, market watchers turned their attention to the UK as Keir Starmer resigned from the pm post.
The pound traded near this year’s low before paring losses as investors considered whether a new Labour administration could revive concerns over the UK’s fiscal outlook.
Former minister Andy Burnham, the current favourite to take over, confirmed on Monday that he is running to replace Starmer.
“Market reaction in gilts and cable (GBP/USD) has so far been contained, reflecting the extent to which a Burnham transition had become anticipated. Burnham’s stated commitment to fiscal rules should help anchor expectations, although international investors are unlikely to welcome another period of leadership change and policy uncertainty. For the UK, renewed focus on the gilt market is itself uncomfortable, even if the immediate moves remain relatively orderly,” Ken Egan, senior director, sovereigns, at KBRA said in a commentary note sent to Euronews.
Markets mixed as analysts monitor US-Iran negotiations
Elsewhere, European markets were mixed on Monday while Asian stocks were also mixed overnight. US futures traded lower.
France's CAC 40 was down 0.07% to 8,415.50 points, while Germany's DAX rose 0.25% to 25, 048.54.
Tokyo’s Nikkei 225 jumped 1.6% to 72,364.82 after reaching a new all-time high of 72,831.73 during intraday trading, helped by technology stocks fuelled by enthusiasm over the global artificial intelligence boom.
Japan’s SoftBank Group, the multinational investment holding company with a strong AI focus, rose 2.4%, while chip equipment maker Tokyo Electron gained 2.3%.
South Korea’s Kospi added 0.4% to 9,084.37 and was trading near record highs, led by AI-related shares. Memory chip maker SK Hynix surged 4.7%.
“We’re seeing another strong market today,” Neil Newman, managing director and head of strategy at Astris Advisory Japan, said. He cautioned that the Japanese market was “probably getting a little stretched” from an investor’s point of view, “especially with what’s going on in the Middle East”.
Hong Kong’s Hang Seng fell 1% to 23,690.86, while the Shanghai Composite Index edged 0.2% higher to 4,098.01.
