European Stocks Drop on U.S.-Iran Tensions as Traders Flee Risk

(Bloomberg) -- European equities fell as investors gave up riskier assets amid rising tensions in the Middle East after a U.S. airstrike in Baghdad killed a top Iranian commander.

The Stoxx Europe 600 Index retreated 0.6% at 8:06 a.m. in London, led by mining shares. Oil shares climbed 0.3%, following the commodity higher as the sector was the only one in the green this morning.

The end of the week is bringing losses to European stocks after they kicked off the new year with the best trading start since 2013. Investors sold equities and chased havens such as gold after Iran’s Supreme Leader Ayatollah Ali Khamenei vowed “severe retaliation” after the death of one of the country’s top commanders, Qassem Soleimani, in Iraq.

“The strikes weigh on investor sentiment as uncertainty comes back to the markets,” said Ulrich Urbahn, head of multi-asset strategy and research at Joh Berenberg Gossler & Co. “However, there are also some winners, such as oil-related assets.”

To contact the reporter on this story: Ksenia Galouchko in London at kgalouchko1@bloomberg.net

To contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, Namitha Jagadeesh

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