Europe close: Stocks slip amid geopolitical tensions in Middle East

(Sharecast News) - European stocks were again in the red on Wednesday as markets struggled for direction in the wake of yet another rise in bond yields and following the bombing overnight of a hospital in Gaza. "With evidence starting to emerge that Israel may not have been responsible for the blast, the reality is that this may no longer matter given the heat already generated by last night's horrific events," said Michael Hewson, chief market analyst at CMC Markets UK.

"A lot of people have already made up their minds and aren't likely to be dissuaded from their initial views which could well mean that it is going to be very hard for cooler heads to prevail."

The Europe Stoxx 600 index was down 1.05% at 445.02, with stocks in London falling 1.14%, Madrid down 0.92%, Paris off by 0.91%, Frankfurt declining 1.03% and Milan 0.82%.

Government bonds continued to be under pressure with the 10-year US Treasury note yield up by seven basis points (bp) to 4.899%. The yield on a 10-year German Bund was up 5bp at 2.93%, nearing its 2011 high of 3.027% reached earlier during the same month.

Meanwhile, gold prices have rallied to a one-month high as investors seek safe havens amid an escalation of violence in Gaza after a hospital strike killed scores of people on Monday afternoon. Gold futures for December delivery were up 1.4% at $1,962.80 an ounce on COMEX.

US president Joe Biden clinched Israeli support for humanitarian aid to reach Gaza during his trip to Tel Aviv on Wednesday and vowed support for Israel.

He also supported the evidence presented by the Israeli military that the hospital had been hit by a missile launched by terrorist group Islamic Jihad.

Yet even in the U.S. some former members of the country's intelligence community reportedly said that Biden might have been better off withholding judgement and instead promising a thorough investigation, given perceptions in the Arab world of unconditional support for Israel.

In economic data news on Wednesday, UK inflation held steady at 6.7% in September, despite expectations for a slight fall to 6.5%. Eurozone inflation stats are due out later this morning, while building permits and housing starts will be released in the US this afternoon.

In company news, Adidas shares gave up early gains after the sporting goods giant pointed to a full-year adjusted operating profit of €100m, compared with previous guidance of breakeven.

UK hospitality group Whitbread managed to swim against the tide after giving a confident outlook as it unveiled a £300m share buyback programme.

Also in London, housebuilder Barratt Developments reported a much slower start to the financial year with net private reservations falling 10% as a result of ongoing challenges prospective buyers are finding in securing mortgages. Sector peers Taylor Wimpey and Berkeley also fell.