European Shares Extend Losses On Fears About Wider Middle East Conflict

(RTTNews) - European stocks traded lower on Friday to extend recent losses as expectations of higher-for-longer interest rates and an escalating Middle East conflict dented investors' appetite for risk.

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.

The U.S. 10-year Treasury yield briefly reached 5 percent 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.

In economic releases, Germany's producer prices declined at a record pace for the second straight month in September, mainly due to the base effect caused by the very high price level of the previous year, preliminary data from Destatis showed.

The producer price index fell 14.7 percent year-over-year in September, faster than the 12.6 percent decline in the prior month.

Further, the latest rate of fall was the biggest since data collection began in 1949. Elsewhere, official data showed U.K. retail sales logged a bigger-than-expected decline in September.

Retail sales dropped 0.9 percent on a monthly basis, in contrast to the 0.4 percent increase in August as the cost-of-living pressures damped spending and consumer sentiment.

Separately, survey results from GfK showed that rising energy costs, high mortgage and rental rates, and geopolitical risks had dampened consumer sentiment in October.

The consumer confidence index unexpectedly fell to -30 from -21 in September. The score was forecast to improve to -20.

The pan European STOXX 600 was down 0.8 percent at 436.13 after losing 1.2 percent on Thursday.

The benchmark index was down nearly 3 percent for the week, marking its biggest weekly loss in three months.

The German DAX fell 1.1 percent, France's CAC 40 was down little over 1 percent and the U.K.'s FTSE 100 shed 0.7 percent.

Swedish garden equipment maker Husqvarna plunged 7.4 percent after posting disappointing third-quarter revenue and announcing another 300 job cuts.

Swiss chemicals company Sika gained 1 percent after confirming its FY23 outlook. Banking major UBS Group AG fell nearly 2 percent after appointing Roger von Mentlen as the chairman of board of directors of UBS Switzerland AG and Credit Suisse (Schweiz) AG.

InterContinental Hotels tumbled 3.2 percent in London after the company said "some short-term financing challenges" are holding back new hotel developments.

French media conglomerate Vivendi rallied more than 2 percent after its third-quarter revenues grew 2.5 percent to 2.43 billion euros from last year's 2.37 billion euros.

Beauty company L'Oreal fell about 1 percent after third-quarter sales came in below estimates.