Europe close: Stocks slip amid geopolitical tensions

(Sharecast News) - Stocks across Europe declined on Monday as oil prices surged on geopolitical uncertainty following an assault at the weekend by Hamas terrorists against multiple towns and cities in Israel. In particular, investors were trying to discern the scope for the conflict to broaden.

The Wall Street Journal reported that officers belonging to Iran's Revolutionary Guard Corps had worked with Hamas since August to prepare the assaults.

A senior Hamas official said the group had planned the attacks alone and a spokesman for Tehran's mission to the United Nations said that Iran had not directed the attacks, the WSJ added.

The Europe Stoxx 600 index was down 0.26% to 443.79, with the Dax falling 0.67% to 15,128.11, alongside a 0.91% drop for Spain's Ibex 35 to 9,151.30.

German bunds and gold rose but the euro fell.

"After Friday's post-NFP rally some trimming in equities was to be expected, but the weekend's events have added extra impetus to the selling. But with recent put buying having hit a high for the year it seems like the risks are skewed to the upside for stocks," said IG chief market analyst Chris Beauchamp.

"The scale of the violence shocked investors but for the moment it appears limited in its scope. Safe havens have been in demand, but a wider sell-off has been halted for the time being."

Crude prices, which had dropped sharply during the preceding week, were rebounding strongly after surprise attacks by Hamas terrorists on Saturday morning that killed more than 700 people, including 260 civilians at a music festival.

Israel swiftly retaliated launching air strikes in Gaza, which are said to have killed more than 500.

Brent touched a high of nearly $89 a barrel on the ICE and was last trading 3.27% higher to $87.86 a barrel.

Industrial production in Germany was reported at down by 0.2% month-on-month in August (consensus: -0.1%).

Oil stocks up, airlines down

Oil and gas stocks rose strongly as crude prices soared. However, Tel Aviv and London-listed Energean was understandably bucking the trend, given it is developing a substantial gas field offshore Israel.

The Stoxx Europe 600 Oil & Gas Index was u%, with Shell, BP and TotalEnergies putting in decent gains.

Airlines were under pressure from both elevated oil prices and travel uncertainty, with Deutsche Lufthansa, IAG, Air France-KLM and Ryanair suffering heavy losses.