European stock markets fell on Monday as investors remained apprehensive in the wake of an escalation of the conflict in Lebanon which has led to new records for crude oil prices, dealers said.
The price of London’s Brent North Sea crude oil hit a record high of $78,18 per barrel as violence continued to rage in the Middle East.
Israeli forces have been relentlessly pounding targets in Lebanon since the middle of last week after Hezbollah captured two Israeli soldiers. Hezbollah has retaliated with rocket attacks on Israeli cities.
In early European deals on Monday, London’s FTSE 100 index of leading shares fell 0,74% to 5 665,10 points, Frankfurt’s DAX 30 index slid 0,76% to 5 381,28 points and the Paris CAC 40 lost 1,04% to 4 731,03.
The DJ Euro Stoxx 50 index of leading eurozone shares shed 0,94% to 3 475,35 points.
The euro stood at $1,2558.
Before the weekend, Wall Street shares had tumbled on Friday for a third consecutive session as investors retrenched in the face of the tensions in the Middle East, sky-rocketing oil prices and soft economic news.
In London on Monday, mining stocks weighed, extending losses from last Friday as investors continued to take profits following recent strength on the back of rising commodity prices.
Antofagasta sank 2,69% to 407,5 pence, Vedanta Resources shed 2,63% to 1 298 pence and Kazakhmys slipped 1,43% to 1 174 pence.
Meanwhile the aerospace sector flew into focus amid the week-long Farnborough International Airshow south of London.
European plane maker Airbus, looking to restore credibility after a recent management crisis, was set to unveil on Monday revised plans for its troubled long-haul A350 passenger jet at the event.
In Paris trading, the share price of the European Aeronautics Defence and Space Company (EADS), which owns 80% of Airbus, sank 0,39% to 2€0,53.
However in London, BAE Systems, which holds the remaining 20% stake, saw its shares gain 1,20% to 337 pence as the group was buoyed by a positive trading update.
In Friday’s US deals, the Dow Jones Industrial Average had lost 0,91% to 10 747,30 points while the Nasdaq tech-heavy index shed 0,79% to 2 037,96 points at the closing bell.
The broad-market Standard and Poor’s 500 index retreated 6,03 points 0,49% to 1 231,90.
The market had also digested news that US retail sales dropped by a surprise 0,1% n June, suggesting that high oil prices were cooling consumer spending.
In Asia on Monday, Hong Kong’s key Hang Seng Index closed down 0.44 percent at 16,064.82 points after Wall Street’s continued falls.
The Japanese stock market, closed for a national holiday on Monday, saw shares sink on Friday on worries over the Middle East and high oil prices, while the end of Japan’s zero interest rates had little impact, dealers said. – AFP