European energy, defense firms rise amid escalating Middle East tensions By Investing.com

Investing.com — European energy and defense stocks rose on Wednesday, although investors remained largely cautious due to ongoing violence in the Middle East.

The pan-European rose 0.3 percent to 522.46 points as of 04:18 ET (08:18 GMT). Meanwhile, Germany traded 0.2% higher, France 0.5% and the UK 0.4% higher.

The broader energy sector provided the biggest gain in European shares, adding more than 1 percent on a rise in oil prices that stemmed from fears that escalating tensions in the Middle East could hurt supply from the oil-rich region.

London-listed shares in Shell (LON: ) and BP (NYSE: ) rose 2.7% and 2.6% respectively, while TotalEnergies (EPA: ) in France climbed 3.2%, the Italian Eni SpA rose 2.8% and Repsol (OTC:) ) in Spain rose 2.2%.

Defense firms including Germany’s Rheinmetall, Sweden’s Saab and BAE Systems (LON:) rose between 1% and 3%.

Iran said its air barrage on Israel — its largest ever on the country — had ended, but warned it would resume the attack if there were further provocations.

Israel could launch a “significant” response in the coming days that could target Iran’s oil production facilities and other strategic sites, according to US news site Axios.

Israeli Prime Minister Benjamin Netanyahu vowed retaliation for Tehran’s airstrikes, saying in a statement on Tuesday that Iran had “made a big mistake” and “will pay for it.”

The US also said there would be “serious consequences” for Tehran’s actions, with Defense Secretary Lloyd Austin adding that Washington was “well placed” to defend its interests in the Middle East.

Iran’s attack was triggered by Israel’s recent attacks on Hezbollah in Lebanon, as well as the ongoing war in Gaza, Tehran said. The US, UN and European Union called for a ceasefire in Lebanon, but fighting continued there on Wednesday morning.