European Stocks Close Sharply Lower

(RTTNews) - 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 Paribas and Societe Generale lost 2 to 4%.

On the economic front, the UK budget deficit declined in September, data from the Office for National Statistics showed.

Public sector net borrowing excluding public sector banks decreased by GBP 1.6 billion from a year ago to GBP 14.3 billion in September. This was the sixth highest September borrowing since monthly records began in 1993.

Data from the Office for Statistics reported that UK retail sales logged a 0.9% drop on a monthly basis in September, in contrast to the 0.4% increase in August. Sales were forecast to ease 0.2%.

Germany's producer prices declined at a record pace for the second straight month in September. The Producer Price Index, or PPI, fell 14.7% year-over-year, faster than the 12.6% decline in the prior month.

Further, the latest rate of fall was the biggest since data collection began in 1949.

New car sales in the EU rose for a fourteenth consecutive month in September on the back of strong demand in Italy and France, monthly data from the European Automobile Manufacturers' Association, or ACEA, showed Friday.

New car registrations grew 9.2% from a year ago to 861,062 units in September. This followed a sharp 21.0 percent rise in August.