Manus on Markets: US warns allies to back its Iran strategy

British stocks slipped lower on Monday, with investors watching for stricter U.S. sanctions on Iran and reacting to a significant tech sell-off in Asia. The FTSE 100 closed 0.03% down, while Germany's DAX and France's CAC 40 each saw declines of 0.25% and 0.18%, respectively. The British pound remained unchanged against the dollar, trading at 1.3643.

Government officials warned of severe economic consequences, with U.S. Treasury Secretary Scott Bessent warning of an "economic D-Day" in his post on social media platform X. Iran's Supreme National Security Council Secretary Mohsen Rezaei threatened to halt oil exports through the Strait of Hormuz and cautioned that countries supporting the U.S. campaign could face an "act of war."

Asian markets added to the risk-off sentiment, with South Korea's KOSPI falling sharply and Hong Kong's Hang Seng down about 2.1%, driven by heavy losses in Samsung Electronics and Alibaba. Investors also remained focused on Nvidia's earnings, scheduled for Wednesday, and Federal Reserve Governor Kevin Warsh's upcoming speech at the Jackson Hole symposium.

Speaker Mike Johnson suggested that the U.S. was entering a new phase in the Iran conflict, hinting that allied nations might support the conflict. He also mentioned that Republicans could maintain their House majority even if the war persisted into the November midterm elections. Oil prices dropped, with Brent crude down 1.7% to $91.09 and WTI crude declining 2.1% to $85.25.

Gold prices gained, with December futures up 0.42% to $4,700.31 and spot gold rising 0.9% to $4,644.70. Shell's U.S. chemical assets have attracted interest from ExxonMobil, LyondellBasell, Apollo and Kuwait Petroleum, with a potential sale value of up to $8 billion.