European stock markets dropped for a second day on Monday as rising tensions and violence in Iraq hampered investors’ risk appetite and drove oil prices to a nine-month high.
The Stoxx Europe 600 index fell 0.3% to 346.06, adding to a 0.2% loss on Friday.
Over the weekend, the violence escalated with the rebels showing photos on Twitter of the execution of hundreds of Shiite Iraqi soldiers. The conflict started Tuesday when the insurgents seized the northern town of Mosul and gradually moved closed to the capital by gaining control of two new towns in the country’s east on Friday.
Oil prices have soared in the wake of the conflict and have further added to concerns about the impact of higher energy prices on the broader global economy. On Monday, crude-oil prices rose to $107.28 a barrel, marking the highest level since September last year.
The U.K.’s FTSE 100 index fell 0.1% to 6,768.86. The benchmark slumped 1% on Friday after hints by Bank of England Governor Mark Carney that the first interest-rate hike could come sooner than markets currently expect. Germany’s DAX 30 index fell 0.3% and France’s CAC 40 index gave up 0.4%.
In corporate news, Alstom SA inched 0.5% higher after a Wall Street Journal report that Siemens AG and Mitsubishi Heavy Industries Ltd. were closing in on making a final offer for Alstom’s energy business. Siemens shares rose 0.2%.
As part of the potential offer, Mitsubishi aims to buy as much as 10% of Alstom from Bouygues SA , which holds a 29.3% stake, according to the report. Bouygues shares fell 1.2%.
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