Source: Sharecast
The pan-regional Stoxx 600 index was down 0.24% in early deals with all major bourses lower.
Tensions in the Middle East increased further after a report that Israel was preparing to strike Iranian nuclear facilities, while the hard-right government of Benjamin Netanyahu was under further pressure from Western leaders over its denial of aid to Palestinians in Gaza, leaving thousands of children facing starvation.
Oil prices were up 1% to above $66 a barrel on the Iran news, while gold pushed beyond $3,300 an ounce as investors sought a safe haven for assets.
“An escalation of conflict in the Middle East is back at on the worry lists following reports that Israel could be planning to hit Iranian nuclear sites,” said Hargreaves Lansdown analyst Susannah Streeter.
“It comes as US-led talks aimed at persuading Iran to halt uranium enrichment have faltered. If Israel does strike, it’s feared that Iran could close the Strait of Hormuz, which is a key route for crude from producers in the Gulf, disrupting world supplies.”
“The situation in Ukraine is also a fresh cause for concern, as although Trump as said negotiations for a truce will start soon, the US administration appears to be retreating from a role as broker in attempting to end the conflict.”
Britain’s FTSE 100 was off 0.15% after inflation jumped by more than expected last month to 3.5% – the highest rate in more than a year – as long-suffering households faced large rises in utility costs and local taxes along with higher supermarket bills.
Economists had been tipping a rise of 3.3% for what has been dubbed “awful April”.
Trump's package of sweeping tax and spending measures moved closer to a full vote in the House of Representatives, with economists warning it could add more than $2.5trln to the federal debt in the next decade. The dollar fell to a two week low on fears of slowing growth and rising prices.
In equity news, shares in JD Sports slumped as the UK-listed retailer said underlying sales in the first quarter fell 2% amid a volatile market and US tariff costs.
Reporting by Frank Prenesti for Sharecast.com