Europe: Stocks fall in wake of US-Iran tensions
Other major bourses also closed in the red, with Germany down 0.3 per cent, France down 0.7 per cent, Britain's FTSE down 0.2 per cent, while Spain's was flat.
Tensions soared after US warplanes joined Israel in bombing Iran's nuclear facilities over the weekend, prompting Iran to brand President Donald Trump a 'gambler' for escalating the standoff.
With aerial assaults between Israel and Iran showing no sign of slowing, jittery markets braced for the possibility that Iran might retaliate by shutting the Strait of Hormuz - the world's most crucial oil passageway.
Investors rushed into safe-haven assets, driving up gold prices and eurozone bonds. Meanwhile, the utilities sector, often seen as a bond proxy, outperformed the Stoxx 600 sectors.
Meanwhile, sources said that Germany will raise defence spending to 3.5 per cent of economic output by 2029 funded through a nearly 400 billion euro borrowing programme.
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Still, Europe's aerospace and defence stocks lost 0.7 per cent.
The US attacks on Iranian nuclear facilities could very well succeed in eliminating a nuclear capable Iran,' said David Bahnsen, chief investment officer of The Bahnsen.
'There is still plenty of risk for short-term volatility driven by the uncertainty of the possibility of Iranian retaliation or a protracted conflict in the region.'
Meanwhile, the July 8 US tariff-pause deadline approaches with little progress on trade deals with Washington, with only a US-UK formal deal reached.
On the data front, fresh data showed euro zone's economy flat lined for a second month in June, barely expanding, as the bloc's dominant services industry showed only a small sign of improvement and manufacturing displayed none at all.
Another survey showed British business activity expanded modestly in June.
The insurance sector lost 1 per cent, dragged by a 4 per cent drop in Munich RE after Morgan Stanley downgraded the stock to 'underweight' from 'equal weight'.
A near 1 per cent gain in technology stocks kept losses at check.
Heavyweight Novo Nordisk fell 5.3 per cent after the Danish drugmaker presented full results from two late-stage trials of its experimental weight-loss drug CagriSema Spectris rose 15.7 per cent after private equity firm Advent said it will acquire the scientific instruments maker in a deal valued at £4.4 billion (S$7.6 billion).
Holcim gained 14 per cent after the Swiss building materials company completed the spin-off of its North American business Amrize.
UCB gained 4.4 per cent after Morgan Stanley upgraded the biopharmaceutical company to 'overweight' from 'equal-weight'. REUTERS
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