European Markets Extend Weekly Losses, Iran Defiant as Israel Steps Up Attacks

Bridgette Randall
04 Oct, 2024
London

European markets lacked direction, the euro held firm, and crude oil prices advanced in Friday's trading. 

Benchmark indexes in London, Paris, Frankfurt, and Milan struggled to advance after the prospect of a wider and prolonged war in the Middle East escalated. 

Crude oil prices soared more than 8% in London and approached $79 a barrel after Israel escalated its attacks on Beirut and expanded its incursion in southern Lebanon. 

President Joe Biden told reporters in Washington that the U.S. government is in "discussion" with Israel about the potential Israeli strike targeting Iranian oil infrastructure. 

“I don’t believe there’s going to be an all-out war. I think we can avoid it,” President Biden told reporters as he returned to the White House after surveying the area damaged by Hurricane Helene. 

Israel is widely reported to be preparing for an air strike in retaliation to Tuesday's ballistic missile attack, which could include Iran's nuclear power facilities and oil infrastructure. 

Shipping companies in Europe traded down on twin worries of rising tensions in the Middle East and the ongoing dockworkers strike at key U.S. ports on the East and Gulf Coasts. 

Late Thursday, the port workers union and the United States Maritime Alliance, in a tentative deal, agreed to extend the current contract till January 15. 

The tentative agreement averted the deepening disruptions to the supply chain that involved the shipment of fruits, pharmaceuticals, automobiles, and wood products, among other goods. 

For the week, the FTSE 100 index is down about 1%, the DAX index 2%, and the CAC-40 index about 3%. 

 

Europe Indexes and Yields

The DAX index increased by 0.2% to 19,046.54; the CAC-40 index rose by 0.5% to 7,515.22; and the FTSE 100 index declined by 0.2% to 8,245.95. 

The yield on 10-year German bonds edged higher to 2.18%, French bonds inched higher to 2.97%, the UK gilts edged up to 4.07%, and Italian bonds increased to 3.50%.

The euro edged lower to $1.10; the British pound inched lower to $1.31; and the U.S. dollar weakened to 85.23 Swiss cents.

Brent crude increased $1.13 to $78.75 a barrel, and the Dutch TTF natural gas rose by €0.08 to €39.83 per MWh. 

 

Europe Stock Movers

Leading container shipping companies and port terminal operators in Europe fell sharply following the rapidly deteriorating situation in the Middle East. 

AP Moeller-Maersk A/S decreased 5.3% to DKK 9,718.0, and Hapag Lloyd AG dropped 12% to €144.20. 

Oil and gas explorers advanced after crude oil prices extended weekly gains to 8% amid worsening situations in the Middle East. 

BP plc increased 1% to 413.35 pence, Shell PLC advanced 0.3% to 2,570.50 pence, TotalEnergies SE added 1.3% to €62.34, and Repsol jumped 5% to €12.19. 

Eni SpA increased 1.6% to €14.34, and the Italian energy company won a contract for the Liverpool Bay CO2 transportation and storage project. 

DSV A/S increased 7.3% to DKK 1,514.0 after the Danish logistics company raised €5 billion to partly finance its acquisition of Schenker. 

Last month, DSV agreed to acquire Schenker from Deutsche Bahn in a transaction valued at €14.3 billion at enterprise value. 

Hexagon Purus ASA dropped 15.5% to €0.81 after the Norwegian green automotive products provider mutually agreed to terminate its agreement with the Daimler Truck's U.S. subsidiary to provide battery-operated electric vocational vehicles. 

Alstom SA soared 4.4% to €19.55 after the French rail mobility company reaffirmed its annual operating earnings margin of 6.5%, an improvement of 80 basis points from the previous year.

The company said EBIT margins are improving because of tighter cost control, higher sales, and a better product mix.