Europe midday: Stocks slip, oil jumps after Hamas attacks against Israel

(Sharecast News) - Stocks across Europe mostly declined on Monday as oil prices surged on geopolitical uncertainty following an assault at the weekend by Hamas terrorists against multiple towns and cities in Israel. In particular, investors were trying to discern the scope for the conflict to broaden.

The Wall Street Journal reported that officers belonging to Iran's Revolutionary Guard Corps had worked with Hamas since August to prepare the assaults.

A senior Hamas official said the group had planned the attacks alone and a spokesman for Tehran's mission to the United Nations said that Iran had not directed the attacks, the WSJ added.

The Europe Stoxx 600 index was down 0.28% to 443.70, with the Dax falling 0.81% to 15,105.89, alongside a 1.04% drop for Spain's Ibex 35 to 9,139.20.

German bunds and gold rose but the euro fell.

Crude prices, which had dropped sharply during the preceding week, were rebounding strongly after surprise attacks by Hamas terrorists on Saturday morning that killed more than 700 people, including 260 civilians at a music festival.

Israel swiftly retaliated launching air strikes in Gaza, which are said to have killed more than 500.

Brent touched a high of nearly $89 a barrel on the ICE and was last trading 3.15% higher to $87.73 a barrel.

"As it nearly always does, an escalation of tensions in the region has helped push up oil prices. This is inevitable given how much of the world's crude reserves and production are centred there," said AJ Bell investment director Russ Mould.

Israeli authorities alleged that Iran may have been involved in the attack, which some are predicting could lead to sanctions by the US on Iran's crude exports, further propping up prices.

Meanwhile, analysts at Rabobank said the event has the potential to make the task of central bankers even more challenging. "A sustained upward pressure in energy prices will make the task faced by central bankers even more difficult. Specifically they will have to weigh up (i) the downward impact on economic growth of higher oil prices and (ii) the risk that an energy driven increase in headline inflation will pose to consumer inflation expectations and the wage negotiation process," they said.

Monday was set to be relatively quiet in terms of economic data, with no major indicators due from Europe or the US, with the latter quiet for Columbus Day - though Wall Street would remain open.

Oil stocks up, airlines down

Oil and gas stocks rose strongly as crude prices soared. However, Tel Aviv and London-listed Energean was understandably bucking the trend, given it is developing a substantial gas field offshore Israel.

The Stoxx Europe 600 Oil & Gas Index was up 2.35%, with Shell, BP and TotalEnergies putting in decent gains.

Airlines were under pressure from both elevated oil prices and travel uncertainty, with Deutsche Lufthansa, IAG, Air France-KLM and Ryanair suffering heavy losses.