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European stock markets declined on Thursday as ongoing tensions in the Middle East dampened investor sentiment. Traders are also awaiting the release of key regional economic activity data, particularly services PMI reports, which could influence monetary policy expectations.
By 07:05 GMT, Germany’s DAX index fell 0.4%, while France’s CAC 40 dropped 0.3%. In contrast, the U.K.’s FTSE 100 managed to rise by 0.3%, buoyed by positive corporate news.
Middle East Conflict Escalates
Investor anxiety has risen due to escalating violence in the Middle East. On Thursday, Israeli airstrikes hit central Beirut, killing at least six people. This follows Israeli ground incursions into Lebanon earlier in the week, as Israel targets Iran-backed Hezbollah fighters.
Iran retaliated on Wednesday with its largest-ever missile assault on Israel, launching around 180 ballistic missiles. While Tehran indicated that it would cease further attacks unless provoked, both Israel and the United States have vowed to respond forcefully, fueling concerns of a broader regional conflict that could impact global markets.
Services PMI Data in Focus
Aside from geopolitical tensions, European investors are awaiting crucial economic data. The release of services Purchasing Managers’ Index (PMI) figures across Europe is expected later on Thursday, which could signal a further slowdown in economic activity. These reports are likely to solidify expectations of interest rate cuts by the European Central Bank (ECB), especially following news that eurozone unemployment remained at a record-low of 6.4% in August.
Tesco Lifts Full-Year Profit Guidance
In corporate news, British supermarket giant Tesco (LON:TSCO) saw its stock rise by over 1% after upgrading its full-year profit outlook. This follows strong half-year financial results, providing a bright spot for the U.K. market amidst broader European declines.
As investors juggle the effects of Middle Eastern unrest and economic data, markets remain volatile, with regional and global developments likely to further influence market direction.
