I’m sure you were just as surprised as me to wake up to news that the US had launched a series of overnight airstrikes targeting an airfield in Syria. Perhaps even more surprising, however, was the muted market reaction. Far from selling off significantly in response to heightened political tensions, global indices took only a minor hit, while this afternoon the UK’s UK 100 has found itself rallying into the close.

My colleague will cover more on the impact that overnight events had on safe haven assets, while below I’ll delve a little deeper into the implications for both Crude Oil and some select UK 100 blue chip stocks.

Crude Oil has been staging something of a come back over the past fortnight, even before this morning’s news. OPEC members have begun suggesting that an extension could be made to its 6-month output cuts, which has provided the commodity with a strong tailwind despite the ongoing threat of US producers re-entering the market with some gusto.

The airstrikes helped this rally to accelerate, as investors position themselves to benefit from what may be an increased US presence in the Middle East under Donald Trump. Syria may not contribute significantly to global crude oil production, but its proximity to major OPEC producers such as Iraq and Iran, saw the price of global benchmark Brent Crude trade at a fresh 1-month high of just over $56 per barrel, while the US benchmark completed a minor bullish flag pattern to $52.95.

However, a strong US dollar following today’s jobs report showing unemployment in the world’s largest economy fell by 0.2% to 4.5% has seen crude prices pare some of their earlier gains. Trading close to rising lows support at the London market close, will Brent and US benchmarks continue to enjoy tailwinds to complete major bullish flag patterns to $56.50 and $53.90, respectively?

And now to the UK Index . Predictably, the UK’s Oil majors BP (BP.) and Shell (RDSb) both traded as much as 1.3% higher over the course of the day, adding 11pts to the index, while a special passing mention must be given to former UK 100 constituent Tullow Oil (TLW), as it continues a remarkable recovery from its rights-issue impacted 9% sell-off yesterday (as low as -15%) to trade over 5% stronger today.

Unsurprisingly, Defence stocks such as BAE Systems (BA.) opened almost 2% higher this morning. The UK based operator is one of the world leaders in producing military hardware, which has seen its shares trading in the top 5 performing stocks for the majority of the day.

Alongside BAE, UK 100 precious metals miners Fresnillo (FRES) and Randgold Resources (RRS) have also found themselves outperforming the majority of the market as their safe-haven wares help both miners acting as a proxy for Gold and Silver.

Overnight events highlight how easy it can be to misinterpret important information and just how crucial it can be to receive the right information, at the right time. That’s where we can help.

Accendo Markets traders contact their clients well before the London market opens to discuss overnight events and where prices may be headed. Our award-winning research department also provides a well-respected and much in demand Morning Report. Just a 5-minute phone call and/or skim read could help you to make the most of the day’s trading opportunities.

Why not sign up to receive our full research offering here, no strings attached, and see how you can compliment the way you trade with Accendo.

Chris Peters, Trader, 7 April