- Airlines, cruise stocks fall amid geopolitical tensions
- Energy shares soar on higher oil prices
- STOXX set for weekly declines
June 13 (Reuters) - European shares touched their lowest level in three weeks on Friday after Israel's attack on Iran soured global risk sentiment and sent investors flocking to safe-haven assets amid an already uncertain trade environment.
The pan-European STOXX 600 was down 0.6% at 546.69 points at 0819 GMT. The benchmark is on track to log a fifth session in the red, its longest losing streak since September 2024.
Israel launched strikes against Iran on Friday, hitting nuclear facilities and ballistic missile factories, to prevent Tehran from building an atomic weapon. Iran retaliated by launching 100 drones.
The tensions add to caution in global financial markets, which have been grappling with the impact of U.S. President Donald Trump's tariff policy.
The heightened tensions in the oil-rich Middle East sent prices of crude soaring, last up over 7%, weighing most heavily on airlines.
The travel and leisure sector was down 2.4%. British Airways owner ICAG tumbled 3.8%, Lufthansa was down 3.3% and EasyJet dropped 3.7%.
Many airlines cleared out of the airspace over Israel, Iran, Iraq and Jordan and Lufthansa suspended all its flights to and from Tehran, disrupting operations.
Cruise operator Carnival's London-listed shares slipped 4.7%.
"We don't know if this will escalate into a bigger regional war, but assuming that it's not the case, the focus for European equities will soon be elsewhere again," said Frank Oland, chief strategist and head of investment strategy at Danske Bank.
On the flip side, energy stocks soared 1.3%, with Shell and BP up 1.85 and 2.6%, respectively.
Volatility in the market increased, with the regional index up 2.32 points at 21.68, its highest since May 26.
Most regional stock bourses were also in the red, with Germany's DAX down 1.2%. Data showed German inflation eased to 2.1% in May, confirming preliminary data.
London's FTSE 100 retreated 0.4% from Thursday's record close.
Investors flocked to safe-haven assets amid the increased uncertainty, with gold prices up over 1%.
The benchmark index is set for weekly declines, as investors were unimpressed by the outcome of U.S.-China talks earlier this week, and doubts over an EU trade deal with the U.S. before Trump's July 8 tariff deadline also loomed.
"I could easily see European equities bounce back... they come from being truly unloved last year and we still have fair valuations in Europe, so this theme of buying into Europe can continue," said Oland.
Among stocks, oil tanker group Frontline gained 6.2% to top the STOXX 600. Shipping giant Maersk advanced 4.6%.
Reporting by Purvi Agarwal in Bengaluru; Editing by Sonia Cheema and Mrigank Dhaniwala
Source: Reuters