European Stocks Close Sharply Lower

European stocks fell sharply on Friday with investors rushing for safe-haven assets as rising Treasury yields, higher interest rates and escalating tensions in the Middle East hurt risk sentiment.

The United States said it is seeing an uptick in attacks on its military bases in Iraq and Syria. European Commission president Ursula von der Leyen said the risk of regional spill over from the Israel-Hamas war is “real.”

Israeli defense minister has ordered ground troops to prepare to see Gaza “from the inside”, though he didn’t indicate when the ground assault would begin.

Meanwhile, the U.S. 10-year Treasury yield reached 5% for the first time since 2007 in the wake of Fed Chair Jerome Powell’s cautious comments on interest rates and President Joe Biden announcement that he would ask Congress for funding to aid Israel.

The pan European Stoxx 600 ended down 1.36%. The U.K.’s FTSE 100 drifted down 1.3%, Germany’s DAX settled lower by 1.64%, and France’s CAC 40 fell 1.52%, while Switzerland’s SMI shed 0.95%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkiye closed with sharp to moderate losses.

Russia bucked the trend and closed sharply higher, while Iceland settled flat.

In the UK market, Rentokil Initial, Carnival, IHG, Anglo American Plc, HSBC Holdings, Smurfit Kappa Group, Prudential, Glencore and Rolls-Royce Holdings ended lower by 3 to 5%.

BAE Systems rallied more than 2%. Hargreaves Lansdown, Mondia, United Utilities and GSK also closed higher.

In the German market, Sartorius and HeidelbergCement both ended lower by nearly 7%. Siemens Energy shed about 3.3%, while Hannover Rueck, SAP, Adidas, Porsche, Deutsche Bank, Mercedes-Benz, Infineon, Munich RE and Siemens lost 2 to 3%.

In Paris, ArcelorMittal, Publicis Groupe, Eurofins Scientific, STMicroElectronics, Schneider Electric, Air Liquide, Legrand, Dassault Systemes, Stellantis, Safran, Michelin, Airbus Group, Alstom, BNP…