European Stocks Rise Amid Ongoing Middle East Tensions
European energy and defense stocks experienced an uptick on Wednesday, even as investors remained cautious due to the continued violence in the Middle East.
The pan-European STOXX 600 increased by 0.3%, reaching 522.46 points as of 04:18 ET (08:18 GMT). The DAX index in Germany was up 0.2%, the CAC 40 in France rose 0.5%, and the FTSE 100 in the U.K. climbed 0.4%.
The energy sector contributed most to the positive momentum in European stocks, surging over 1% after oil prices spiked due to concerns that escalating tensions in the Middle East could impact supply from the region.
Shares of Shell (LON:SHEL) and BP (NYSE:BP) rose by 2.7% and 2.6%, respectively. TotalEnergies (EPA:TTEF) in France increased by 3.2%, Eni SpA in Italy climbed by 2.8%, and Repsol (OTC:REPYY) in Spain was up 2.2%.
Defense companies such as Rheinmetall from Germany, Saab from Sweden, and BAE Systems (LON:BAES) saw increases ranging from 1% to 3%.
In recent developments, Iran declared that its largest aerial attack on Israel was concluded but warned of resuming attacks if provoked. Israel is anticipated to respond robustly, potentially targeting oil facilities in Iran, as stated by Israeli Prime Minister Benjamin Netanyahu. The U.S. has indicated that severe consequences for Tehran are forthcoming, with Defense Secretary Lloyd Austin asserting that the U.S. is prepared to protect its interests in the region.
The hostilities were ignited by Israel’s actions against Lebanon-based Hezbollah and the ongoing war in Gaza, according to Iran. Calls for a ceasefire from the U.S., United Nations, and European Union were made, but fighting persisted early Wednesday.
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