European stocks mixed as Middle East conflict risks weigh

European stocks were mixed on Monday as traders digested rising tensions in the Middle East after attacks by Israel and Hezbollah over the weekend.

According to CNBC, the pan-European STOXX 600 index fell to 518.22 points, after hitting a more than three-week high on Friday and posting its third straight weekly gain.

Germany’s DAX closed down 0.06%. Italy’s FTSE MIB ended down 0.09%. Spain’s IBEX 35 fell just 0.03%.

France’s CAC bucked the trend to close up 0.23%. UK markets were closed on Monday for a national bank holiday.

Switzerland’s nonfarm payrolls rose 1.3% in the second quarter, data showed on Monday, while German business confidence and detailed GDP data from Europe’s largest economy are due on Tuesday.

Eurozone economic data is also due this week, with preliminary consumer price data from Spain, German retail sales and preliminary consumer prices.

Inflation data will also be in focus in Europe, with the region’s major economies – Germany, France, Italy and Spain – due to release August figures alongside the 20-nation eurozone as a whole.

Inflation in the single currency area is expected to slow from 2.6% in July, paving the way for the European Central Bank to cut interest rates for the second time this cycle when it meets in September.

The start of the week will see updates on output and sentiment in Germany – the region’s current weak link. Speakers likely to comment on monetary policy and recent shifts in the economy include ECB Governing Council members Joachim Nagel and Klass Knot, as well as Executive Board member Isabel Schnabel. In eastern Europe, Hungary is expected to keep interest rates on hold at 6.75%.

The week ends with preliminary euro zone data, preliminary consumer prices in France and Italy, employment data in Germany and personal consumption spending in the United States.

The technology sector was the biggest loser on the STOXX 600 on Monday, down 0.4%, but the property sector made up for the losses and rose 0.5%.

Faroe salmon producer Bacafrost fell 2.5% after reporting lower-than-expected second-quarter revenue.

London stocks were closed for a holiday.

In addition, a survey showed on Monday that German business confidence continued to fall for a third straight month in August, undermining hopes of a recovery for Europe’s largest economy.

The Ifo institute said its business climate index fell to 86.6 in August from 87.0 in July, above analysts polled by Reuters for a reading of 86.0.

“The German economy is increasingly sliding into crisis,” said Ifo president Clemens Fuest.

The institute said its survey of about 9,000 managers found that business confidence continued to decline and that companies rated their current situation as worse.