LONDON, Oct 16 - Markets showed signs of a slight recovery in sentiment on Monday, as European stock indexes edged up and oil prices steadied, but traders were still cautiously watching for any signs of escalation in the Israel-Hamas war.
Traders are waiting to see if the conflict draws in other countries, which would drive up oil prices further and deal a fresh blow to the global economy. "What the market will be looking for in order for the mood to improve would be any sort of de-escalation ... and on the downside any sense that the oil-rich nations are going to be involved would be a catalyst to drive stocks lower," said Fiona Cincotta, senior markets analyst at City Index.Top U.S. officials warned on Sunday that the war could escalate into a wider conflict across the Middle East.
This narrative, along with company earnings this week, has become secondary to the geopolitical concerns, Cincotta said. The U.S. dollar index slipped slightly, down 0.1% on the day at 106.470 . The euro was up 0.2% at $1.053 .Gold pared some of Friday's $63 gain, retreating 0.9% to $1,914.7 per ounce.