Europe open: Stocks slide as oil prices rise; Hermes tumbles

(Sharecast News) - European stocks fell in early trade on Thursday amid higher oil prices, having taken their cue from a weak session in Asia, as investors sifted through a raft of corporate news. At 0900 BST, the benchmark Stoxx 600 index was down 0.9%, while Germany's DAX and France's CAC 40 were both 1.1% lower.

At the same time, Brent crude was up 2.6% at $111.16 a barrel and West Texas Intermediate was 2.4% higher at $99.51 amid reports the US is planning to resume strikes against Iran and following a Houthi drone strike on Saudi Aramco's Shaybah oil field, which prompted the US State Department to order the departure of non-emergency personnel from Saudi Arabia.

According to The New York Times, the US and Israeli militaries have drawn up specific plans for renewed strikes on Iran after next month's midterm elections. Citing US officials and other people briefed on the deliberations, the NYT said planning for a "short but intensive" operation is progressing.

Susannah Streeter, chief investment strategist at Wealth Club, said: "Asian markets tanked as semi-conductor stocks sold off as investors turned wary again about the rising costs of borrowing, fuelled by stubbornly high energy prices. The Nikkei closed down 2.2% while South Korea's Kospi plunged by more than 3%, as the big chip players SK Hynix and Samsung, which account for around 50% of the index due to their huge valuations took a hammering. The cost of getting into the AI race is already eye-watering, and trying to keep abreast of the competition is a high-stakes game.

"Brent crude has crept higher as tensions in the Middle East ratcheted up again. Houthi forces have again attacked Saudi energy infrastructure, with strikes on Aramco's Shaybah oil field. With the US administration ordering personnel to leave embassies, it doesn't instil much confidence in ongoing efforts to find a resolution."

In equity markets, Barclays dipped as it reported a slightly lower-than-expected third-quarter profit following a strong performance in equities but weakness in fixed income, and announced a £500m share buyback. In the three months to the end of September, pre-tax profit grew 12% to £2.3bn, missing expectations of £2.4bn, while earnings per share were 18% higher year-on-year at 12.3p.

Hermes tumbled after the luxury fashion brand reported a slowdown in third-quarter sales, while Roche nudged lower even as the Swiss pharmaceuticals group's third-quarter sales exceeded forecasts.

Nestle gained as the food and drinks giant's third-quarter organic sales growth beat expectations.