Europe close: Stocks dip amid geopolitical tensions

(Sharecast News) - European shares slipped into the red after a positive start to the session as renewed strikes on Houthi rebels in Yemen in response to attacks on Red Sea shipping tempered sentiment. The pan-regional Stoxx 600 index was down 0.28% at 471.53 with all major bourses lower alongside.

"Although hopes for super-early rate cuts have dissipated there are still expectations that with inflation heading in the right direction in the US, policymakers will go easier. The S&P 500 crept even higher to fresh new levels, and the expectations are that this will support a slightly higher open again in Europe," said Hargreaves Lansdown analyst Susannah Streeter.

Meanwhile, the US carried out its eighth round of airstrikes against targets in Yemen on Monday, which the Pentagon said was "proportionate and necessary". Houthi militants, backed by Iran, had been attacking merchant ships in the Red Sea, forcing vessels to take longer routes to port, adding to costs and creating delays.

In the UK, the government borrowed much less than expected last month, according to data released on Tuesday by the Office for National Statistics.

Public sector borrowing, excluding banks, rose £7.8bn in December, which was below the £14.1bn economists were expecting.

It was also £8.4bn below the amount borrowed a year earlier and marked the lowest borrowing for the month of December since 2019.

In equity news, Logitech fell 11% lower after reporting a fall in sales.

French healthcare firm Sanofi's shares slipped after it agreed to purchase the development project INBRX-101 from its parent company Inhibrx in a deal worth $2.2bn.