Markets Overview: (Source: Bloomberg, FT, Reuters, DJ Newswires)

UK 100 called to down -21pts at 6768, after Middle-Eastern markets were slammed yesterday amid escalating violence in Iraq. The DFM (Dubai Financial Markets) General Index plunged 4.7%, the heaviest hit in the region.

The Islamic State in Iraq and the Levant, a breakaway al-Qaeda group, is advancing toward Baghdad after taking the northern city of Mosul. Iraqi military helicopters attacked positions held by Sunni Muslim militants north of Baghdad as the U.S. moved an aircraft carrier into the Persian Gulf for possible air strikes to support the Shiite-led government.

The UK 100 suffered a near 1% decline of Friday led by House Builder stocks and the Leisure and Travel sector.

Persimmon (PSN.L) and Barratt Developments (BDEV.L) declined 6.99% and 6.30% after Chancellor George Osborne gave the Bank of England powers to curb mortgage lending (if required) to cool off a rampant property market. The sector has been in vogue for some time as a result of low interest rates and the government's 'Help to Buy' scheme.

Institutional brokers remain bullish on the sector with average target prices of 1471p (21.5% higher) and 482p (39.2% higher) respectively according to Bloomberg.

Shares in International Consolidated Air (IAG.L), easyJet (EZJ.L) and Tui Travel (TT..L) fell as much as 3% after Britain's air regulator CAA said airlines would no longer be able to cite technical faults as a reason for not paying compensation.

Under current rules a technical issue can be deemed an 'extraordinary circumstance' meaning passengers do not have to be compensated for resulting delays. The rule change will only recognise events such as lightning strike, extreme winter weather or strike action as an 'extraordinary circumstance' meaning passengers will be able to seek compensation of between €250-€600 for delays suffered as a result of technical issues.

Unsurprisingly Asian markets have struggled to perform this morning, the Hang Seng and ASX 200 clinging on to positive territory, up less than 0.1%.

The Nikkei 225 and TOPIX, the hardest hit in the region, down as much as 1%. The situation in Iraq prompting aggressive profit taking after four weeks of gains.

The Dow Jones and S&P 500 indices are likely to retreat from near record high, closing levels of 16,775pts and 1,936pts on Friday as a result.

Commodities: Gold advances to a three-week high of $1,284.25 as escalating violence in Iraq increased the demand for the metal. Light Crude hit $106.09 a barrel while Brent reached $113.06 a barrel due to the situation in Iraq.

FX: GBP/USD hit $1.70 the highest level since August 2009 as S&P upgraded the outlook on the UK to stable from negative citing the impact the recovery will have on the government’s finances.

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Key Overnight Macro Data: (Source: Reuters/DJ Newswires)

• NZ                          Westpac Consumer Confidence                  IN-LINE
• NZ                          Performance Services Index                       IN-LINE
• UK                          Rightmove House Prices  (MoM)               IN-LINE
• UK                          Rightmove House Prices  (YoY)                IN-LINE

See Live Macro calendar for full details

UK Company Headlines: (Source: Reuters/DJ Newswires)

•             Mitchells & Butlers acquires Orchid Group for 266 mln stg

•             Vodafone launches buyout offer on Italy's Cobra at 1.49 euros