According to Citigroup strategists, UK stocks provide investors with an effective hedge amid renewed geopolitical turmoil following the outbreak of conflict involving Iran. A team led by Beata Manthey upgraded their rating on UK equities from "underweight" to "overweight" in their global equity strategy report. The team believes the UK market's exposure to commodities and defensive sectors enables it to withstand shocks from rising oil prices. "The Iran conflict introduces a new source of uncertainty for risk assets," the team wrote in the report. "The UK market has significant tilts toward commodities and defensive sectors, alongside considerable weight in aerospace and defense, allowing it to serve as an effective geopolitical hedge within equity portfolios." Manthey noted that while global equity markets have historically recovered relatively quickly after conflicts, they tend to face significant downside risks when such events lead to sustained increases in energy prices. She indicated that Citigroup's commodity strategists expect "a clear near-term upside for crude oil prices." On Monday, oil prices recorded their largest single-day gain in four years, with the global benchmark Brent crude rising approximately 8% to near $79 per barrel. Manthey and her team downgraded Japanese equities from "overweight" to "underweight," as the country's stock market tends to underperform during periods of rising oil prices. On Monday, the FTSE 100 outperformed other European indices, including the STOXX Europe 600, led by gains in defense and commodity-related stocks. At the time of writing, the UK benchmark index was down 0.99%, while the broader pan-European index had fallen 1.5%.