Global markets mixed as geopolitical tensions rise

LONDON: Global markets were mixed at the start of the week on Monday as investors remained cautious in the face of increased geopolitical risks, while early gains on Wall Street helped prevent a steeper sell-off in Europe.

Traders said investors were concerned about tensions between the United States and Russia after US President Donald Trump suggested there could be no peace in Syria while Moscow-backed President Bashar al-Assad remains in power.

Markets were "struggling for direction amid a lack of significant macroeconomic and corporate releases," said Accendo Markets analyst Henry Croft.

"Rising geopolitical tensions are keeping a lid on any major market moves, despite investors once again returning to equities" after the US air strike against Syria sent them scurrying to safe havens such as gold, the yen and US treasuries last week.

"Global stocks were mixed... with participants adopting a defensive stance after the heightened geopolitical risks weighed heavily on sentiment," said FXTM analyst Lukman Otunuga.

After share prices had "simply struggled for direction" in Asia, "the cautious trading mood and the noticeable anxiety has limited gains in Europe," Otunuga said.

He suggested that stocks could come under renewed selling pressure "as geopolitical risks are compounded with the messy mixture of political uncertainty, Brexit woes and Trump developments".

Wall Street was steady after early gains, but most of the main European markets ended the session lower, with Frankfurt dipping 0.2 percent and Paris shedding 0.5 percent, while London was practically flat.

Among the gainers in London, mining giant BHP Billiton added 2.5 percent on the back of news that major shareholder Elliott Funds had written to directors urging them to carry out a major restructuring.

France's CAC 40 suffered the heaviest losses of the major eurozone markets, as opinion polls showed left-winger Jean-Luc Melenchon -- who had previously not been seen as a serious contender -- gaining ground ahead of the first round of the presidential election on April 23.

"The increased congestion in the polling, added to the level of indecision among voters, may yet give the euro a fright," said Societe Generale analyst Kit Juckes, adding that it could also send shares lower.

Oil prices extended gains after Friday's rally, which came after the US bombings on concerns about supply from the crude-rich Middle East.

Oanda analyst Jeffrey Halley said in a note that oil prices "will continue to be headline- rather than fundamentals-driven this week".

"Although Friday's Syria strike was almost certainly a one-off, with so many players in close proximity the situation will remain 'fluid' to say the least," he added.