European stocks drop as tensions mount in the Middle East

UNITED STATES (OBSERVATORY NEWS) — The European stock market fell on Friday after a US air strike that killed a prominent Iranian military leader escalated tensions in the Middle East and prompted investors to move away from high-risk assets, while airline stocks were hit by a jump in oil prices.

Iranian Supreme Leader Ali Khamenei has vowed harsh retaliation after the killing of Qassem Soleimani, an engineer who deployed Iran’s military influence in the Middle East, in the air strike launched around the Baghdad airport.

The pan-European STOXX 600 ended the trading session down 0.3 percent, and German stocks hit their worst day in a month, with Lufthansa Airlines falling 6.5 percent.

Other airlines’ losses, including Air France and EasyJet, pushed the European travel and tourism index to close 1.6 percent lower, due to fuel price concerns as oil rose more than 3 percent.

But the jump in oil prices lifted the European energy sector’s stock index to its highest level in seven weeks. The fall in the British pound helped the FTSE British stock index to close on gains, contrary to markets.

In its first trading this year, Swiss shares rose 0.8 percent after recording gains of 26 percent last year, as investors bought the shares of consumer goods companies.


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