FTSE and US markets fall and oil rises as Israel-Gaza conflict leaves 1,100 dead

Oil prices jumped on Monday as markets across the world digest an escalating conflict in the Middle East.

Israel formally declared war on Hamas on Monday after a surprise attack over the weekend. More than 1,100 people have been killed across Israel and Gaza.

Brent crude futures (BZ=F) were more than 4.2% higher by the end of the trading day in London, jumping as high as $89 a barrel, before settling around $88.10 This followed the biggest weekly price drop since March last week.

"Oil prices will be under the spotlight, with supply disruption fears providing a reason for Brent and WTI (CL=F) to rally. However, a repeat of the 1973 oil price spike seems unlikely, given the diminished role of OPEC and a changed diplomatic landscape," said Chris Beauchamp, chief market analyst at IG.

Read more: Gold price drop bellwether for inflation sentiment

The FTSE 100 (^FTSE) and European stocks, meanwhile, were down, with London's premier index falling 0.1% by the end of the day, having been supported throughout the day by energy stocks.

The DAX (^GDAXI) in Germany and France's CAC (^FCHI) were 0.8% and 0.7% lower respectively.

Over in the US, indexes also fell, with the S&P 500 (^GSPC) down 0.3%, the Dow (^DJI) losing 0.1% and the tech-heavy Nasdaq (^IXIC) down 0.8%.

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