European Stocks Decline Amid Middle East Tensions; Tesco Raises Guidance

European stock markets experienced a largely downward trend on Thursday, influenced by the ongoing conflict in the Middle East, with traders awaiting regional economic activity data.

As of 03:05 ET (07:05 GMT), the DAX index in Germany declined by 0.4%, while France’s CAC 40 fell by 0.3%. In contrast, the UK’s FTSE 100 saw a slight increase of 0.3%.

### Middle East Conflict Escalates

Early Thursday, Israel launched airstrikes in central Beirut, resulting in at least six fatalities, as it continued its campaign against Iran-backed Hezbollah following ground incursions into Lebanon earlier in the week.

In response, Iran launched approximately 180 ballistic missiles at Israel on Wednesday, marking its largest assault against the country to date. Tehran indicated that it would refrain from further attacks unless provoked, but Israel and the United States vowed to retaliate decisively.

Analysts noted that the escalation in the Middle East is causing markets to factor in a heightened risk of a broader conflict, which could potentially involve the United States.

### Services PMI Data Due

Investors in Europe have more economic reports to consider on Thursday, following recent figures showing that unemployment in the eurozone remained steady at a record low of 6.4% in August.

Services PMIs are expected across Europe, likely indicating a further slowdown in activity and reinforcing expectations for rate cuts in the region.

### Tesco Raises Full-Year Guidance

In corporate news, Tesco’s stock increased over 1% after the British supermarket chain raised its full-year profit guidance, bolstered by strong half-year results. CEO Ken Murphy stated, “We are in good shape, with volume growth delivering strong financial performance.”

### Crude Gains on Middle East Turmoil

Oil prices rose on Thursday amid concerns that the escalating violence in the Middle East could disrupt crude supplies from this crucial exporting region.

By 03:05 ET, Brent crude climbed 1.3% to $74.89 per barrel, while U.S. crude futures (WTI) increased by 1.6% to $71.19 per barrel.

Traders are closely monitoring Israel’s potential retaliation against Iran’s missile strikes, particularly regarding threats to Iranian oil infrastructure. Additionally, U.S. crude inventories saw a rise of 3.9 million barrels to reach 417 million barrels for the week ending September 27, contrary to expectations for a decrease of 1.3 million barrels.