(Bloomberg) — European stocks declined, tracking weakness in Asian equities as a world-beating rally in Chinese shares paused. Oil extended gains amid rising tension in the Middle East.
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The Stoxx Europe 600 index fell 0.4% at the open after a gauge of Chinese stocks snapped a 13-day winning run. Futures on the S&P 500 and Nasdaq 100 declined. Bloomberg’s dollar index gained for a fourth day, bolstered by a rise in Treasury yields.
Global equities are on course for their first weekly loss in four amid the threat of an escalation of conflict in the Middle East. Israel on Wednesday pressed ahead with a ground incursion against Hezbollah in southern Lebanon, while considering its response to Tuesday’s missile attack by Iran. Investors’ focus will also be on Friday’s US payrolls data to further gauge the Federal Reserve’s next policy move.
Brent crude oil rose for a fifth day, climbing toward $75 a barrel, as investors awaited Israel’s response to Iran’s missile attack. The US President Joe Biden urged Israel to hold off from attacking Iran’s nuclear facilities.
“The question has been about how aggressive Israel’s response will be and whether energy infrastructure will be impacted, but expectations are that more clarity may still take some time,” said Jun Rong Yeap, a market strategist at IG Asia Pte.
In Europe, companies are facing additional headwinds. French President Emmanuel Macron endorsed a temporary tax on the country’s largest companies, while US prosecutors broadened a probe of potential price-fixing by German software maker SAP SE and tech reseller Carahsoft Technology Corp.
The pound weakened after the Guardian reported Bank of England Governor Andrew Bailey as saying the central bank could be a “bit more aggressive” with interest-rate cuts.
The strengthening dollar added to the pressure on the yen as stronger-than-expected ADP jobs data on Wednesday led traders to pare bets on aggressive Fed rate cuts. Swaps traders were penciling in some 33 basis points of policy easing at the central bank’s November…
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