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UK Shares Start Week Muted; British American Tobacco Falls

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Trading in the UK started on a weak note, with the FTSE 100 down 0.09% at closing on Monday, after a volatile weekend of missile and drone attacks from Iran and US retaliatory strikes against Iranian military targets.

"[Overnight] developments suggest a tentative de-escalation, with the US and Iran reportedly agreeing to halt further attacks ahead of renewed technical talks in Doha this week," Deutsche Bank Research said. "Both sides are said to be standing down for now, allowing shipping flows to continue, although disputes over key provisions of the memorandum of understanding--particularly around control and potential costs for transit through Hormuz--mean the situation remains fragile and risks to regional stability persist."

In the UK, net borrowing of consumer credit by individuals declined to 1.66 billion pounds sterling in May, from the revised 1.71 billion pounds in April, according to Bank of England data. Net mortgage approvals for house purchases came in at 56,205, compared with the revised 66,034 in the prior month and the expected 63,000.

Meanwhile, Britain's M4 money supply grew 0.1% month over month in May, against the 0.2% increase in April, the Bank of England said. Analysts expected a 0.2% gain for the month.

Further this week, investors will examine the British Retail Consortium's shop price inflation, current account data, final first-quarter gross domestic product, and the S&P Global PMI reports, among other economic news.

In corporate news, British American Tobacco (BATS.L) dropped 0.72% on the blue-chip index after the tobacco company proposed to reduce 5,500 roles globally, excluding the US, as part of its Fit2Win transformation program.

Meanwhile, BT Group (BT-A.L) and its US peer Verizon Communications agreed to combine their international enterprise operations in a 50-50 joint venture with $4 billion in combined annual revenue. The British telecom giant will receive an equalization payment of $625 million from Verizon. BT was up 0.51% at closing.

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Asia Markets

Tadawul Shares Start Week Lower on Renewed Middle Eastern Geopolitical Tensions

Stocks trading in Saudi Arabia started the week lower as the renewed attacks between the US and Iran pushed the Tadawul All Share Index 0.23% in the red on Sunday.The potential reescalation of the US-Iran war dominated global headlines as Iran launched retaliatory attacks on US military targets in Bahrain and Kuwait after US President Donald Trump warned of potential military action against Iran.Investors are now raising concerns regarding the fragility of its interim peace deal as the back-and-forth attacks prompted both parties to accuse one another of violating the agreement.Back at home, Adeer Real Estate (SASE:9634) shares closed 5.47% lower as it entered into an exclusive marketing and sales services deal for the 850-room Millennium Hotel in Makkah.Meanwhile, SAL Saudi Logistics Services (SASE:4263) via its SAL Ground Handling unit secured a one-year renewable deal to deliver ground handling and air cargo services for Singapore Airlines' operations in the Riyadh-based King Khalid International Airport. Shares of the company ticked down 0.89% at closing."Partnering with a globally respected carrier such as Singapore Airlines is a testament to the quality and reliability of SAL's ground handling and air cargo services. Through this agreement, we are committed to delivering world-class operational standards that support the growth of the Kingdom's aviation and logistics sector and reinforce its position as a global hub for transport and logistics, in line with Saudi Vision 2030," the logistics company's Chief Executive Officer Omar bin Talal Hariri commented.

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Asia Markets

US Equity Indexes Mixed, Mag-7 Lags Amid Micron Technology's Blockbuster Quarterly Results This Week

US equity indexes were mixed as a decline in technology hit tech-heavy gauges, outweighing a lift in sentiment from maritime traffic slowly returning to the Strait of Hormuz, the chokepoint for about a fifth of global energy flows.* The S&P 500 closed at 7,354.02 on Friday versus 7,500.58 a week ago. The Nasdaq Composite stood at about 25,297.62, compared with 26,517.93 a week earlier. The Dow Jones Industrial Average ended at 51,876.11, versus 51,564.70 at the end of last week.* Technology, consumer cyclicals, and communications services were among the bottom five sectors over the past week, according to data compiled by Finviz. Healthcare, utilities, and real estate were the top gainers.* The so-called Magnificent-7 stocks ended the week lower. Shares of Apple (AAPL), one of the Mag-7 stocks, slumped after the company raised prices of its iPads and MacBooks amid surging memory costs. Micron Technology (MU) shares surged even though its blockbuster fiscal Q3 results, fueled by strong demand for memory, failed to trigger a rally in the sector.* West Texas Intermediate crude oil futures slumped 3.5% to $69.47 late Friday, hovering at levels seen around the beginning of the Iran war as maritime traffic continued to pass through the Strait of Hormuz, the chokepoint for about a fifth of global energy flows.* The 10-year US Treasury yield, which traded around 4.67% last month, declined to 4.37% late on Friday and was also lower from 4.45% a week ago.* "While we have heard from a number of Fed officials increasingly willing to consider a higher level of rates, as the latest June dot plot shows, the Committee is clearly divided, with essentially the other half viewing policy as in exactly the right spot and anticipating no additional change this year," Stifel Chief Economist Lindsey Piegza said in a note, referring to impact of supply-push crude oil on elevated headline and core personal consumption expenditures, PCE, price index readings for May.

Dow JonesNasdaq CompositeS&P 500$AAPL$MU
Asia Markets

Update: Technology Helps Push US Equity Indexes Lower; Israel-Lebanon Sign 'Framework Agreement'

(Updates with index/price moves, macroeconomic data, and political news from the first paragraph.)US equity indexes fell amid a decline in technology shares, while crude oil traded at levels last seen before the Iran war after a "framework agreement" was signed between Israel and Lebanon.The Nasdaq Composite fell 0.2% to 25,297.62 on Friday. The Dow Jones Industrial Average edged down almost 0.1% to 51,876.11, while the S&P 500 slipped less than 0.1% to 7,354.02. Industrials and technology led decliners. Health care, consumer discretionary, and real estate were among the top gainers.In a category of stocks with a market capitalization of over $200 billion, 17 out of the 20 worst-performing stocks were technology firms. Western Digital (WDC) and Sandisk (SNDK) were the steepest decliners, down by at least 11% each. In the sliding technology shares, more than half were semiconductor companies.Global X Artificial Intelligence & Technology ETF (AIQ), with a market capitalization of almost $11 billion, dropped 1.6% to $63.15, reflecting the pressure on AI stocks.In geopolitical news, negotiators from Lebanon and Israel signed a "framework agreement" on the handover of areas in Israeli-occupied southern Lebanon after US-mediated talks in Washington, DC., according to a Friday report from Al Jazeera, a Middle East news broadcaster.This comes as Arsenio Dominguez, the secretary-general of the UN's International Maritime Organization, said 115 vessels and 2,500 seafarers have been evacuated from the Strait of Hormuz since Tuesday, Al Jazeera reported.Oman has told European officials that there's no way to return to the pre-war status quo at the Strait of Hormuz, and transiting ships may be charged fees, Bloomberg reported, citing people familiar with the matter. "Safe passage through the Strait of Hormuz cannot be guaranteed under ambiguous arrangements, parallel routes or decision-making that does not take Iran's role as a coastal state into account," Reuters cited Iranian Deputy Foreign Minister Kazem Gharibabadi as saying on X, formerly Twitter.Nevertheless, the front-month global benchmark North Sea Brent slumped 4.2% to $72.07 per barrel, and the US West Texas Intermediate retreated 3.5% to $69.40 per barrel, extending their declines to the lowest since the beginning of the Iran war.In economic news, the University of Michigan consumer sentiment index was revised up to 49.5 for June from 48.9 in the preliminary estimate, below expectations of 50.0 in a Bloomberg-compiled poll. The print was also above the final 44.8 in May.Respondents in the Michigan survey expected a 4.6% inflation rate over the next year and 3.3% annually over the next five years, down from 4.8% and 3.9%, respectively, in May.Most US Treasury yields fell, with the 10-year down two basis points to 4.37%. The two-year rate dropped 3.5 basis points to 4.09%.Gold futures jumped 1% to $4,086.9, and silver futures climbed 1.1% to $59.0.

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