European shares dip on Middle East tensions ahead of US-China talks

On Thursday, European shares slipped marginally as investors navigated the lingering Middle East tensions and prepared for the anticipated US-China summit. The pan-European STOXX 600 index fell 0.4% to 637.56 points by 0710 GMT. Most regional stock exchanges also recorded a decline in their values. The cautious investor sentiment was further fueled by the volatile energy markets, which were impacted by the ongoing geopolitical tensions in the Middle East.

Iranian officials held discussions with US envoys at the UN General Assembly, yet both parties indicated minimal progress in resolving the conflict. Oil prices experienced a slight uptick as traders evaluated the potential risks to supply stemming from the Middle East situation, with Brent crude futures staying above the pivotal $100-per-barrel mark.

European energy equities exhibited a modest gain of 0.3%, while aerospace and defense stocks trailed sectoral declines, notably affecting companies like Saab and Hensoldt. A summit involving US President Donald Trump and Chinese President Xi Jinping is also a focal point, with expectations for advancements in trade relations. Among specific companies, Shelly Group experienced a 6.2% surge after Schneider announced their intention to launch a €1.2 billion ($1.4 billion) takeover bid for the Bulgarian smart-device producer.

However, shares in H&M declined by 2.5% even after the Swedish fashion retailer disclosed a more significant-than-anticipated rise in operating profits for the June-August period.