European stocks fall largely on Middle East tensions; Tesco raises guidance from Investing.com

Investing.com – European stocks were mostly lower on Thursday as the ongoing conflict in the Middle East weighed on sentiment, ahead of the release of data on regional economic activity.

At 03:05 ET (07:05 GMT), Germany was trading 0.4% lower and France was down 0.3%, while Britain was up 0.3 %.

The conflict in the Middle East is escalating

Israel bombed central Beirut early Thursday, killing at least six people, as it continued its pursuit of Iran-backed Hezbollah after it began ground incursions into Lebanon on Tuesday.

Iran responded on Wednesday by firing around 180 ballistic missiles at Israel – the largest attack on Israel ever. Tehran said it was over, barring further provocation, but Israel and the United States vowed to retaliate strongly.

“The escalation in the Middle East has caused markets to price in a higher risk of a full-fledged conflict in the region that could involve the US,” analysts at ING said in a note.

PMI Data Due Services

European investors are due to study more economic data on Thursday, a day after figures showed that eurozone inflation was flat in August, at a record low of 6.4% in August.

are due across Europe and are likely to show further moderation in activity and cement expectations for rate cuts in the region.

Tesco (OTC:) raises guidance for the full year

In the corporate sector, Tesco ( LON: ) shares rose more than 1% after the British supermarket upgraded its full-year profit guidance after revealing solid half-year results.

“We are in good shape with volume growth delivering strong financial performance,” said CEO Ken Murphy.

Crude gains on Middle East unrest

Oil prices rose on Thursday as escalating violence in the Middle East raised concerns that crude flows could be disrupted from the key exporting region.

By 3:05 a.m. ET, the contract was up 1.3% at $74.89 a barrel, while futures (WTI) traded 1.6% higher at $71.19 a barrel .

Traders are awaiting Israel’s response if Iran fired more than 180 missiles into its territory on Wednesday, amid fears they could target Iranian oil infrastructure.

Meanwhile, U.S. crude inventories rose 3.9 million barrels to 417 million barrels in the week ended Sept. 27, the Energy Information Administration said on Wednesday, compared with expectations for a 1.3 million draw of barrels.