European stocks decline as US-Iran tensions fuel safe haven buying - CNBC

European stocks traded lower on Monday, as investors monitored rising tensions between the United States and Iran.

The pan-European Stoxx 600 slipped 0.7% in early deals, with chemicals and travel stocks falling more than 1.2% to lead losses as all sectors except oil and gas, which spiked a further 1%, traded in the red.

Market players are fleeing riskier assets like equities in favor of safer alternatives like gold and bonds after a U.S. airstrike last week killed Iran's top military commander, Qasem Soleimani, in Iraq. The attack has heightened already-volatile relations between Washington and Tehran.

Oil is also surging on the back of intensifying U.S.-Iran tensions, amid fears it could disrupt supply in the Middle East. Brent crude futures were up 2.3%, or $1.56, at $70.16 a barrel at 6:46 a.m. London time. U.S. West Texas Intermediate (WTI) crude futures climbed 2%, or $1.25, to $64.31.

Over the weekend, Iraq's parliament passed a resolution calling for the government to expel foreign troops from the country. President Donald Trump responded by threatening to impose sanctions on Iraq. Meanwhile, Iran has declared it will no longer adhere to uranium enrichment restrictions agreed under the 2015 nuclear deal.

In Asia, markets mostly fell with Japan leading the losses. The Nikkei 225 dived 1.9% while MSCI's broadest index of Asia-Pacific shares excluding Japan slipped 1%.

Back in Europe, Spanish Socialist leader Pedro Sanchez failed to secure parliament backing to form a government. He'll have another chance on Tuesday, when another vote will be held in which he only requires a simple majority.

In terms of data, German retail sales for November and euro zone composite PMI (purchasing managers' index) for December are due to be released later this morning.

Stocks on the move

Swedish Match shares continued last week's climb, adding 3.5% early in Monday's trading session to lead the Stoxx 600, while at the other end of the European benchmark, London-headquartered Hikma Pharmaceuticals slid 4.7% after J.P. Morgan downgraded the stock.

Air France KLM continued to slide on the back of escalations in the Middle East and subsequent rising oil prices, shedding 3.5% in early deals.

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2020-01-06 06:02:00Z
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