Europe midday: Iran, US strikes, Israel invasion of Lebanon hits sentiment

(Sharecast News) - European shares were mixed and oil prices higher after the US struck targets in Iran over the weekend, while Kuwait came under attack on Monday morning.

The pan-regional Stoxx 600 index was down 0.13% to 625 at 1146 BST. The UK's FTSE fell 0.20% and France's CAC 40 reversed morning losses to be 0.13% higher. Germany's DAX outperformed with a 0.38% gain and Italy's MIB rose 0.1%.

US Central Command said its attack was "self defence" against "aggressive Iranian actions", including the shooting down of a US drone that was "operating over international waters".

American strikes hit Iranian radar and command and control sites for drones in Goruk, Iran and Qeshm Island.

Iran's Islamic Revolutionary Guard Corps said it had targeted an airbase used by the US in response to the attack on southern Iran, without ⁠identifying which base.

Air defences in Kuwait, where a major US ​base is located, were intercepting missile and drone attacks as ​sirens sounded across the country, the state news agency KUNA reported. Brent Crude jumped 3% to $93.91 on the news.

Meanwhile, Israel continued to annexe more territory in Lebanon as its own moves against Iran and influence over Washington's military campaign appeared to be faltering.

"Even though there have been attacks from both sides, the market is holding onto the fact that negotiations ae ongoing, and an elusive Iran/ US deal to end the war in the Middle East and to reopen the Strait of Hormuz will still be found," said XTB research director Kathleen Brooks.

"As the focus switches to a raft of macro releases later this week, investors will need to watch how this plays out, and any delay in reaching a deal could knock market sentiment."

European leaders condemned the expanding incursion after Israeli troops captured the medieval Beaufort castle. France's president Emmanuel Macron saying there was no justification for the escalation.

In economic news, German retail sales fell less than expected in April, down by 0.3% compared with the previous month, data showed on Monday. Analysts had forecast a 0.5% decrease.

Meanwhile a survey revealed that eurozone manufacturing activity figures for May were revised slightly higher but confirmed that growth still slowed from its highest level in nearly four years the previous month.

The S&P Global eurozone manufacturing purchasing managers' index (PMI) was adjusted to 51.6 from the preliminary estimate of 51.4, coming in ahead of analysts' expectations for no change from the 21 May report.

However, that was still down from 52.2 in April - the highest level recorded in 47 months - with S&P Global citing that the "upturn [had] lost momentum as demand stagnated".

In equity news, shares in easyJet jumped as the budget airline confirmed private credit firm Castlelake had made what it called a 'highly opportunistic' takeover bid.

Castlelake on Friday said it was in the "early stages of considering a possible offer" for easyJet but had not approached the airline's board.

Wise tanked 15% after a report from the Bureau of Investigative Journalism said prosecutors in Belgium opened investigations into the digital money transfer fintech platform for suspicious transactions worth €500m.

Reporting by Frank Prenesti for Sharecast.com