London stocks traded almost unchanged on Tuesday as oil prices moved closer to $100 a barrel.
Investors also assessed new Canadian tariffs on US goods and fresh economic data from China and the UK.
At 8:30 BST, the FTSE 100 stood almost flat at 10,820.56. Meanwhile, Brent crude gained 1.8% to $98.72 a barrel. West Texas Intermediate also climbed 3% to $94.18.
Oil prices rose after Iran-backed Houthi forces attacked several cities in Saudi Arabia. The attacks reportedly injured more than 70 people and caused fires at several oil facilities.
Higher oil and gas prices have increased concerns about inflation. Investors now worry that central banks could keep interest rates higher for longer.
Susannah Streeter, chief investment strategist at Wealth Club, said geopolitical tensions and trade disputes could increase costs for households and businesses.
She also highlighted fresh trade tensions between Canada and the United States.
Canada introduced retaliatory tariffs on about $20 billion of US goods. The new duties range from 15% to 50%.
The measures followed the collapse of trade talks between Ottawa and Washington.
Streeter warned that the latest tariffs could create more uncertainty for businesses and consumers.
She also noted that Brent crude had moved above $98. Wholesale gas prices also climbed as markets priced in greater risks around the Strait of Hormuz.
Investors also reviewed China’s latest trade figures.
Chinese exports increased 25% year-on-year in August. That followed 23.9% growth in July and broadly matched market expectations.
Exports have now risen 19.3% year-on-year so far this year. Their total value has reached about $2.92 trillion.
ING said strong external demand continues to support China’s key export industries.
Chinese imports also grew in August. Growth reached 28.2%, compared with a revised 27.6% in July. However, the figure fell below the 31% growth that economists expected.
UK retail sales also showed signs of weaker consumer spending.
The latest BRC-KPMG retail sales monitor showed total sales rising 0.7% year-on-year in August. That result fell below the 12-month average growth of 1.6%.
Food sales increased 2.6%. However, non-food sales declined 0.8%. In-store non-food sales fell 1.2%, while online non-food sales dropped 0.2%.
British Retail Consortium economist Harvir Dhillon said August delivered a disappointing performance.
Rising household bills have encouraged consumers to reduce discretionary spending. Shoppers also avoided larger purchases such as furniture and household appliances.
Retailers now face pressure from both higher costs and weaker demand. The upcoming Autumn Budget could therefore prove important for the sector.
Several companies made significant moves during early trading. Computacenter jumped 4.76% after raising its earnings outlook. The technology provider expects full-year adjusted earnings of at least £380 million.
The company reported an 87% rise in first-half pre-tax profit to £152.4 million. Autotrader also gained after Jefferies upgraded its rating from “hold” to “buy”.
Rightmove climbed after Jefferies raised its rating from “underperform” to “hold”. BP, Compass Group and Antofagasta also recorded gains.
Dunelm suffered the biggest decline among FTSE 250 companies. Shares dropped 9.76% after the homeware retailer reported flat full-year pre-tax profits.
The company also launched a three-year growth strategy. However, it warned that unusually hot weather affected trading during the first six weeks of its new financial year.
Other FTSE 250 fallers included Johnson Service Group, Avon Technologies and Baltic Classifieds.
The FTSE 100 stood at 10,820.56, almost unchanged. The FTSE 250 fell 0.17% to 24,465.61. The techMARK index gained 0.48% to 6,100.32.
Oil prices remained a key focus for investors. With Brent crude approaching $100, markets continue to monitor geopolitical risks, inflation and interest-rate expectations closely.
