Europe open: Shares, oil, gold up as Middle East tensions rise

2nd Oct 2024 08:23

(Sharecast News) - European shares were higher at the open on Wednesday despite the threat of a wider Middle East war as Israel looked to be expanding conflict in the region.

The pan-regional Stoxx 600 index was up 0.22% at 522 with all major bourses higher. Oil and gold prices jumped as investors sought safe haven alternatives to equities.

Tensions increased overnight as Iran launched a multiple-missile attack on Israel in retaliation for the assassination of Hezbollah leader Hassan Nasrullah and other commanders last week, while Israel continued its invasion of Lebanon.

"A subdued tone has hit trading as markets brace for further repercussions from the Middle East crisis. The (UK) FTSE 100 has headed higher in early trade, partly because of its defensive nature, helped by strength in energy stocks as oil prices continue their march upwards," said Hargreaves Lansdown analyst Susannah Streeter.

"As Iran's cruise missile attack on Israel and fresh strikes on Hezbollah in Lebanon have unnerved investors. The uncertainty has made safe-haven assets like gold more popular, with demand for the precious metal ticking up close to record levels, as violence spills further across the Middle East, briefly climbing above $2,670 an ounce."

Oil prices also made strong gains with Brent Crude up more than 2% at $75.20 a barrel, although there was still speculation that Saudi Arabia would increase production soon. Producers BP and Shell both gained on the news.

In other equity news, shares in JD Sports fell despite the sportswear retail chain reporting higher interim profits and holding annual guidance.

Reporting by Frank Prenesti for Sharecast.com