Europe open: Shares slump as oil, gas prices surge on Iran gas field attack

(Sharecast News) - European markets slumped at the open on Thursday on the back of yet another surge in oil and gas prices after Israel bombed Iran's biggest gas facility and Tehran responded with attacks on facilities in Qatar and Kuwait.

The pan-regional Stoxx 600 index was down 1.87% to 586.72 in early deals with all major bourses in the red. Germany's DAX dived 2.53% and France's CAC 40 declined 1.73%.

Tensions were raised considerably as Iran has threatened to attack energy infrastructure across the Gulf region in retaliation for Israeli strikes on the gas facilities at the enormous South Pars field, the largest gas reserves in the world.

Iran's Revolutionary Guards have threatened counterstrikes on several energy facilities across Saudi Arabia, the UAE and Qatar.

Qatar's Ras Laffan liquified natural gas terminal suffered "extensive further damage" on Thursday morning, officials said.

Kuwait's Mina Al-Ahmandi refinery was also hit by drones, while US President Trump - who is claiming no knowledge of Israel's strikes - warned that if Iran hit Qatar's energy facilities again America would "massively blow up the entirety of the South Pars Gas Field"."

Oil and gas prices spiked, with benchmark Brent crude up 8.41% to $116.4 and US West Texas Intermediate 1.45% to $97.72. Month-ahead gas on the Dutch soared 24% to �67.79 per kilowatt hour.

"These latest energy price increases will compound inflationary concerns after the Federal Reserve held rates steady yesterday at 3.5%-3.75%. Beyond the impact of tariffs and the energy shock, chair Jerome Powell also noted stubborn services inflation," said Hargreaves Lansdown analyst Derren Nathan.

"The bank's year-end core PCE inflation forecast was raised from 2.4% to 2.7%. Rate cuts are still being considered for later in the year, but markets are no longer pricing in a further cut in US headline rates this year."

In other economic news the Bank of Japan also held rates steady but noted that future developments in the Middle East "warrant attention". Switzerland and Sweden also stood pat, and the Bank of England is forecast to do the same later in the day.

On the equities front, oil stocks were predictably on the march, with Equinor, Var Energi, Aker BP, BP, Galp, Eni and TotalEnergies all up.

INWIT shares nosedived after Telecom Italia and Fastweb, the Italian arm of Swisscom, said they planned to build up to 6,000 telecom towers in Italy, in a potential blow for the country's top mast operator.

Reporting by Frank Prenesti for Sharecast.com