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Jan. 3, 2020, 11:11 a.m. EST

European stocks drop and oil soars after U.S. airstrike kills top Iranian general

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By Callum Keown


Getty Images
A mock US flag is laid on the ground for cars to drive on in the Iraqi capital Baghdad following news of the killing of Iranian Revolutionary Guards top commander Qasem Soleimani

European stocks tumbled and oil prices soared on Friday after a top Iranian commander was killed in a U.S. airstrike at Baghdad’s airport.

The Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP -0.49%  fell 0.4% after paring early heavy losses, and the DAX /zigman2/quotes/210597999/delayed DX:DAX -0.62%   dropped 1.4%, reversing yesterday’s new year rally, while Brent crude futures soared 4% to $68.62 and West Texas Intermediate crude for February   jumped 3.8%.

The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.44% , home to oil majors BP /zigman2/quotes/202286639/delayed UK:BP -2.71%   and Shell /zigman2/quotes/206428183/delayed UK:RDSA -2.02% , suffered smaller losses in early trading and rebounded to trade 0.2% for the day.

What’s moving the markets?

General Qasem Soleimani, Iran’s most powerful military commander, was killed by a U.S. airstrike in Iraq on Thursday night, sending global markets into a spin. The Pentagon said Soleimani was “actively developing plans to attack American diplomats and service members in Iraq and throughout the region”.The attack reignited geopolitical tensions with Iran’s Supreme Leader Ayatollah Ali Khamenei promising “severe revenge.”

U.S. stock futures dropped and European stocks followed in early trading on Friday, while Brent crude futures /zigman2/quotes/209704782/delayed UK:BRN00 -0.24%  jumped more than 4%.

As investors sought safe havens amid mounting risk, the price of gold /zigman2/quotes/210034565/delayed GC00 -0.18%   climbed 1.3% to $1548.

AJ Bell investment director Russ Mould said: “It is unsurprising to see crude oil prices trade higher to factor in potential disruption to supply from the region.

“Turbulence often sees investors reaching for the safety belt of gold exposure and this explains the advance for the precious metal this morning.”

He added: “What happens next for equities will depend on what form Iran’s promised ‘severe revenge’ takes and how nations which are more friendly to it, like China and Russia, respond.”

Which stocks are active?

Airline stocks were among the worst affected as oil prices rose sharply. Air France /zigman2/quotes/205396176/delayed FR:AF -3.30%   plunged 7.7%, Deutsche Lufthansa /zigman2/quotes/205496028/delayed DE:LHA -1.79% dropped 6.6% and easyJet /zigman2/quotes/202825892/delayed UK:EZJ -0.56%   fell 3.4%.

Conversely, oil majors posted solid gains with BP /zigman2/quotes/202286639/delayed UK:BP -2.71%   rising 2.7% and Royal Dutch Shell /zigman2/quotes/206428183/delayed UK:RDSA -2.02%   gaining 2%.

/zigman2/quotes/210599654/delayed
XX : STOXX
428.07
-2.12 -0.49%
Volume: 0.00
Feb. 21, 2020 5:50p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
13,579.33
-84.67 -0.62%
Volume: 108,765
Feb. 21, 2020 6:30p
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,403.92
-32.72 -0.44%
Volume: 838,159
Feb. 21, 2020 4:59p
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/zigman2/quotes/202286639/delayed
UK : U.K.: London
453.55 p
-12.65 -2.71%
Volume: 32.27M
Feb. 21, 2020 4:35p
P/E Ratio
29.98
Dividend Yield
7.15%
Market Cap
£91.13 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/206428183/delayed
UK : U.K.: London
1,887.80 p
-39.00 -2.02%
Volume: 9.50M
Feb. 21, 2020 4:35p
P/E Ratio
12.32
Dividend Yield
7.68%
Market Cap
£147.63 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/209704782/delayed
UK : U.K. ICE Futures Europe
$ 58.36
-0.14 -0.24%
Volume: 226,352
Feb. 21, 2020 10:59p
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/zigman2/quotes/210034565/delayed
US : U.S.: Nymex
$ 1,645.90
-2.90 -0.18%
Volume: 471,801
Feb. 21, 2020 4:59p
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/zigman2/quotes/205396176/delayed
FR : France: Euronext Paris
9.08
-0.31 -3.30%
Volume: 4.52M
Feb. 21, 2020 5:38p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
€3.88 billion
Rev. per Employee
€328,953
loading...
/zigman2/quotes/205496028/delayed
DE : Germany: Frankfurt
14.78
-0.27 -1.79%
Volume: 34,285
Feb. 21, 2020 8:58p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€264,465
loading...
/zigman2/quotes/202825892/delayed
UK : U.K.: London
1,508.50 p
-8.50 -0.56%
Volume: 957,966
Feb. 21, 2020 4:35p
P/E Ratio
17.16
Dividend Yield
2.91%
Market Cap
£5.97 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/202286639/delayed
UK : U.K.: London
453.55 p
-12.65 -2.71%
Volume: 32.27M
Feb. 21, 2020 4:35p
P/E Ratio
29.98
Dividend Yield
7.15%
Market Cap
£91.13 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/206428183/delayed
UK : U.K.: London
1,887.80 p
-39.00 -2.02%
Volume: 9.50M
Feb. 21, 2020 4:35p
P/E Ratio
12.32
Dividend Yield
7.68%
Market Cap
£147.63 billion
Rev. per Employee
N/A
loading...

Callum Keown is a Barron's Group reporter for the Europe, Middle East and Africa region. He writes for MarketWatch, Barron’s, Penta and Financial News.

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