iShares MSCI United Kingdom ETF

EWU

Market cap $3.45B

The UK's main stock indexes started June on a weaker footing on Monday as investors assessed the economic impact of the ongoing Middle East conflict. Gains in several merger and acquisition-related stocks helped limit broader market losses.

European shares opened lower on Monday as escalating tensions in the Middle East weighed on investor sentiment, while markets also reacted to corporate developments involving British airline easyJet and Amsterdam-listed Universal Music Group. The pan-European STOXX 600 index was down 0.1% at 0709 GMT, extending the subdued mood seen at the end of the previous week.

Goldman Sachs has raised its 12-month target for the STOXX 600 index to 660, citing resilient corporate earnings growth and continued support from artificial intelligence-related investments despite the ongoing conflict in the Middle East. The pan-European benchmark index has remained close to record highs and gained 2.5% in May.

Goldman Sachs has raised its 12-month target for STOXX 600 index to 660, the U.S. brokerage said, citing resilient corporate earnings ​growth despite the war in the Middle East.

As political uncertainty grows in the United Kingdom, investors are increasingly focused on the country's fiscal outlook and rising government borrowing costs. Bloomberg Opinion Columnist John Authers says concerns over spending, debt, and political instability are pushing gilt yields higher, reviving memories of past market crises that helped topple governments from Harold Wilson to Liz Truss.

Britain said shipowners and operators who recklessly damaged subsea internet cables could face tougher penalties, including prison sentences, under proposals to ​help deter Russia and other hostile states from sabotaging vital national ‌infrastructure.

Market expectations that the European Central Bank will hike interest rates this year have already contributed to tighter financial and lending conditions. The "transmission of tighter policy is already underway," Goldman Sachs noted.

A carousel of leaders has taken its toll, driving up borrowing costs and dragging down investment.

Britain's benchmark FTSE 100 index fell on Thursday, snapping a seven-day winning streak, as renewed hostilities between the United States and Iran weighed on investor sentiment and clouded hopes of reopening the Strait of Hormuz. The blue-chip FTSE 100 index fell 0.8% to 10,418.33 points by 1013 GMT.

The European Central Bank's decision to keep rates ​unchanged last month was ‌a close call for some policymakers as signs of persistently high ​inflation made it hard ​to look past the energy-driven shock, ⁠the accounts of the ​meeting showed on Thursday.