Europe midday: Middle East jitters, weak services PMI send Stoxx lower

3rd Oct 2024 11:49

(Sharecast News) - European shares were lower on Thursday as Israel's continuing attacks on Lebanon, and fears of regional conflict escalation hit investor sentiment.

The pan-regional Stoxx 600 index was down 0.54% at 518 with most major bourses lower. The pound weakened after Bank of England governor Andrew Bailey told the Guardian newspaper that the central bank could become a "bit more aggressive" in cutting interest rates as long as news on inflation continued to be good.

Oil prices held gains, with Brent crude above $75 amid supply worries should the Middle East conflict spread.

Israel bombed the Lebanese capital of Beirut early on Thursday, killing at least six people, as in addition to its ground invasion of the country.

In economic news, industrial output in the eurozone rose more than expected in August, according to data released by Eurostat.

Industrial production increased by 0.6% in August, easily beating expectations for a 0.3% increase.

However, when compared with August 2023, production was 2.3% lower, following a downwardly revised 2.2% drop in July and forecasts for a decline of 2.4%.

Meanwhile, the eurozone economy faltered in September, a closely-watched survey showed, weighed down by slowing growth in the bloc's dominant services sector.

The latest seasonally-adjusted HCOB eurozone composite PMI output index was 49.6, down on August's 51.0 and the first time it has fallen into contraction since February. It was, however, above the flash estimate of 48

In equity news, shares in SAP fell on a report said that US prosecutors are widening a probe on potential price-fixing by the German software developer.

Tesco shares rose after the UK supermarket chain lifted annual guidance on the back of strong interim results.

Reporting by Frank Prenesti for Sharecast.com