Europe open: Shares fall as Iran truce cracks over Israel attacks on Lebanon

(Sharecast News) - The rally in European shares came to a shuddering halt on Thursday and oil prices crept northwards again as the fragile US-Iran ceasefire showed signs of cracking a day after it was announced.

The pan-regional Stoxx 600 index was down 0.39% to 611 at 0810 BST with all major bourses lower.

Iran accused the US of breaching the agreement, citing Israel's continued attacks on Lebanon - where the civilian death toll is rising quickly as Israeli forces effectively annexe the country's southern region.

Israel Prime Minister Benjamin Netanyahu unilaterally exempted his country from the ceasefire deal and ordered more bombardments of residential areas in the Lebanese capital of Beirut, claiming he was targeting Hezbollah militants.

Tehran is also insisting on its right to enrich uranium, which Washington is adamant will not happen.

Meanwhile the Strait of Hormuz - a key international waterway - now effectively has a toll gate at its Northern end operating by Iran's Revolutionary Guard.

US military forces will remain in the Gulf until Tehran fully complies with the "real agreement", US President Donald Trump said on Wednesday.

"If for any reason it is not, which is highly unlikely, then the "Shootin' Starts," bigger, and better, and stronger than anyone has ever seen before. It was agreed, a long time ago, and despite all of the fake rhetoric to the contrary - NO NUCLEAR WEAPONS and, the Strait of Hormuz WILL BE OPEN & SAFE. In the meantime our great Military is Loading Up and Resting, looking forward, actually, to its next Conquest. AMERICA IS BACK!" he wrote on social media.

In equity news, cyclical stocks all swapped places, with energy producers rising and travel and leisure shares turning red on fears the conflict could resume quickly.

Reporting by Frank Prenesti for Sharecast.com