Markets have been under pressure this week on concerns about a potential Western military intervention in Syria in response to last week’s alleged chemical weapons attack that killed over a thousand civilians.

The risk of disruptions to oil supplies in the Middle East has sparked a surge in crude prices – West Texas futures jumped to its highest level in over two years yesterday – which is beginning to erode growth prospects for the global economy.

“European markets opened firmly today as investors finished taking as much risk out of their portfolios as they could bear. However, volumes are once again proving painfully thin as many seem to be adopting a wait-and-see-strategy over whether the West will confirm military intervention in Syria,” said Financial Trader Shavaz Dhalla from Spreadex.

“Investors seem to be rattled by reports that energy giants China and Russia have openly expressed their concerns over a military strike whereas the UK and the US have not made a categorical stance regarding their positions.”

Markets will have their hands full in terms of economic data on Thursday, with a number of closely-watched indicators due for release during today’s session, including German unemployment, German inflation, US growth estimates and US jobless claims.

Telecoms group Vodafone was a high riser this morning after confirming that it has restarted talks with partner Verizon about the possibility of selling its 45% stake in their US joint venture, Verizon Wireless.

Advertising and media giant WPP was also making decent gains after revealing a 19% increase in half year pre-tax profit as slowing growth rates among emerging markets were eclipsed by a strong performance among mature markets like North America and the UK.

Engineering investment firm Melrose Industries saw revenues top the £1bn mark in the first half as results were boosted by Elster – the gas, electricity and water measurement business it acquired last year. Shares rose strongly early on.

Airline peers IAG and easyJet were higher this morning, rebounding as oil prices edged lower. The recent surge in crude has sparked worries over rising jet fuel costs for the travel industry.

Leading the downside was outsourcing group Serco after it was revealed that it is under investigation by the City of London police in regards to a “misreporting of data” by a number of employees. Serco said it will forgo any future profits on the £285m contract. Investors were largely ignoring a strong first-half report by the company this morning which showed a 10.5% rise in first-half adjusted profits.

Insurance firm Admiral was also lower after its first-half results as markets were underwhelmed by a 6% rise in profits and an 8% increase in the interim dividend.

Falling metal and oil prices were hitting resource stocks this morning with Fresnillo, Randgold, Shell and Tullow Oil among the worst performers.

Source: ShareCast