Euronext NV stock exchange in Paris.
Nathan Lane | Bloomberg | Getty Images
LONDON — European stock markets opened mixed on Monday as traders digested rising tensions in the Middle East following weekend attacks by Israel and Hezbollah.
Germany's DAX index was down 0.18% at the open, while Italy's FTSE Mib index was down 0.09%. Spain's Ibex 35 index was flat and France's Cac 40 index rose 0.14%. UK markets were closed on Monday for a bank holiday.
The incident comes as oil prices rise on fears of an escalating conflict in the Middle East, with more than 100 Israeli fighter jets striking targets in Lebanon over the weekend and Iran-backed Hezbollah firing more than 320 rockets at Israel.
Brent crude rose 0.86% to $79.70 a barrel by 8:10 a.m. London time, while U.S. West Texas Intermediate crude rose 0.88% to $75.49 a barrel.
“While the market expectation is that an Iranian attack would hit Israel but not spark a wider regional conflict, the Israeli response will be equally important, as it could include attacks on Iranian oil supplies and associated infrastructure, putting 3-4% of global oil supplies at risk,” Vivek Dhar, mining and energy commodities strategist at Commonwealth Bank of Australia, told CNBC.
The pan-European Stoxx 600 index tracked the US market higher last week, rising 1.3% to end the week in solidly positive territory.
U.S. stock futures were little changed on Monday after Federal Reserve Chairman Jerome Powell last week signaled that a rate cut was imminent. While he did not specify when the first rate cut would come, traders are unanimously expecting a cut at the Fed's next meeting on Sept. 18, according to CME Group's FedWatch tool.
Markets were mixed in the Asia-Pacific region, with Japan's Nikkei down 1.09%, Hong Kong's Hang Seng Index up 0.99% and mainland China's CSI300 index down 0.15%.
On the European calendar, investors will be keeping an eye on minutes of the Riksbank and Ifo economic climate data.
Later this week, euro zone inflation data is due to be released on Friday and will be closely watched for hints as to whether the European Central Bank will cut interest rates further next month.
—CNBC's Lim Hui Jie contributed to this report.
