March 9 (Reuters) - Futures tied to Canada's main stock index dipped on Monday as escalating tensions in the Middle East drove up oil prices, amplifying inflation concerns among investors.
March futures on S&P/TSX composite index were down about 0.92%, as of 6:50 a.m. ET. Wall Street stock futures were also down sharply in the wake of the Middle East conflict.
Geopolitical tensions intensified after Iran appointed Mojtaba Khamenei, son of late Ali Khamenei, as the supreme leader. The move was seen as a sign that hardliners remain firmly entrenched in Tehran's leadership as the conflict with the United States and Israel entered its tenth day, reinforcing fears that the war could drag on.
Oil prices surged to levels not seen since mid-2022 as major producers cut supplies and fears of prolonged shipping disruptions gripped the market. Crude prices, however, were off day's highs following reports that G7 finance ministers would discuss the possible release of emergency reserves, while traders said Saudi Aramco has offered more than 4 million barrels of Saudi crude in rare tenders.
Meanwhile, gold prices were under pressure due to a stronger dollar.
Canada's benchmark equity index (.GSPTSE), led by heavyweight mining and energy companies, slipped from record highs hit last month and has lost close to 3.7% so far in March on worries that higher oil prices will add to inflation pressures.
Traders will have their eyes on U.S. inflation readings and Canadian jobs data, due later in the week, for cues on monetary policy outlook.
Brokerage J.P.Morgan downgraded First Quantum Minerals (FM.TO), opens new tab to "underweight" from "overweight" and Lundin Mining Corp (LUN.TO), to "underweight" from "neutral".
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Reporting by Rashika Singh in Bengaluru; Editing by Diti Pujara
