Escalating tensions in the Middle East dented investor sentiment on Tuesday morning as traders largely shook off some upbeat economic data closer to home.Business sentiment in Germany improved across the board in August as the Eurozone's largest economy continues to build momentum. The IFO report, based on a survey of 7,000 German executives, came in better than expected this morning with the business climate, current assessment and expectations sub-indices all showing improvement month-on-month.Stock markets across Europe seemed largely underwhelmed by the data with the FTSE 100 in London extending losses by mid-morning.Matt Basi, Head of Sales Trading at CMC Markets, said: "In truth, traders don't need much persuading to reduce risk at the moment with the quantitative easing picture still unclear - particularly after the weak US data we saw yesterday - and today's move probably reflects investors following the old adage 'if in doubt, stay out'."Investors this morning were instead focusing on comments last night by US Secretary of State John Kerry said last night that Syria would be held accountable for the "moral obscenity" of the chemical weapons attack that has killed well over a thousand people. "By any standard it is inexcusable," he said, sparking speculation of a potential US involvement in the Syrian crisis."It's difficult to say if we are indeed likely to see military intervention by the US just yet - the US would need UN approval but having said that, the US is no stranger of taking matters in its own hands without the backing of the UN," said Market Strategist Ishaq Siddiqi from ETX Capital."Whatever action the US takes, it has to play this carefully as it risks triggering a flare up of the unrest in the Middle East and also risks hurting relations with Russia."FTSE 100: IAG hit by broker downgradeInvestec was weighing on the share price of airline group IAG this morning after downgrading the stock from 'buy' to 'hold' following its near-70% jump so far this year (as of Friday's closing price). The broker said that rising capacity and stubbornly-high fuel prices will act as headwinds for the industry in 2014.RBS was lower after a group of MPs demanded a break-up of the state-backed lender ahead of a report that is thought to reject the split into a 'good' and 'bad' bank. The Parliamentary Commission on Banking Standards sent a letter to the Financial Times which said it is "important for all the options for [RBS's] future structure to be examined as a matter of urgency".Antofagasta was also a heavy faller after reporting that revenues in the first half dropped 12.1% to $2.7bn, reflecting a decline in copper prices and increased costs. Precious metals peers Fresnillo and Randgold meanwhile were high risers as gold and silver prices edged higher.Oilfield services group Petrofac gained after saying it remains on track to deliver growth this year despite both revenues and profits slipping in the first half. The company reiterated that the full year would be significantly weighted to the second half.Retail peers M&S and Next were performing well after the stocks had their ratings upgraded by Citigroup and Bank of America, respectively.Security solutions group G4S rose after weekend reports that activist investment fund Cevian Capital - its second-biggest investor - is to double its stake in the firm to 10%FTSE 100 - RisersFresnillo (FRES) 1,305.00p +6.70%Petrofac Ltd. (PFC) 1,330.00p +5.14%Marks & Spencer Group (MKS) 484.70p +2.78%G4S (GFS) 251.20p +2.20%Randgold Resources Ltd. (RRS) 5,225.00p +1.95%Next (NXT) 4,990.00p +1.51%BG Group (BG.) 1,197.50p +1.31%Bunzl (BNZL) 1,371.00p +1.26%Morrison (Wm) Supermarkets (MRW) 295.80p +1.02%Associated British Foods (ABF) 1,905.00p +0.95%FTSE 100 - FallersInternational Consolidated Airlines Group SA (CDI) (IAG) 302.20p -4.31%CRH (CRH) 1,359.00p -3.27%Standard Chartered (STAN) 1,446.50p -3.08%Royal Bank of Scotland Group (RBS) 334.20p -2.93%GKN (GKN) 336.90p -2.66%Antofagasta (ANTO) 891.50p -2.57%London Stock Exchange Group (LSE) 1,562.00p -2.50%TUI Travel (TT.) 348.60p -2.46%Lloyds Banking Group (LLOY) 73.08p -2.29%Rio Tinto (RIO) 3,003.50p -2.13%FTSE 250 - RisersPerform Group (PER) 520.00p +3.28%UBM (UBM) 720.50p +2.71%Ocado Group (OCDO) 298.60p +2.61%Centamin (DI) (CEY) 40.62p +2.19%African Barrick Gold (ABG) 170.00p +2.16%Premier Oil (PMO) 350.30p +1.80%Big Yellow Group (BYG) 414.70p +1.72%Bumi (BUMI) 214.70p +1.61%NMC Health (NMC) 335.20p +1.27%Halfords Group (HFD) 387.50p +1.23%FTSE 250 - FallersPolymetal International (POLY) 756.00p -6.61%JPMorgan Indian Inv Trust (JII) 289.20p -5.86%Imagination Technologies Group (IMG) 265.00p -4.88%Thomas Cook Group (TCG) 142.40p -4.24%Pace (PIC) 278.50p -4.10%International Personal Finance (IPF) 588.00p -3.69%Hikma Pharmaceuticals (HIK) 1,039.00p -3.53%Bank of Georgia Holdings (BGEO) 1,726.00p -3.52%Paragon Group Of Companies (PAG) 320.90p -3.20%Jupiter Fund Management (JUP) 346.80p -3.13%BC