European stocks slip as Middle East tensions rise; EasyJet surge and UMG deal news in focus

Dubai: European shares opened slightly lower on Monday as escalating tensions in the Middle East dampened hopes for a near-term resolution to the conflict. Investors also turned their attention to dealmaking developments involving the UK’s easyJet and Amsterdam-listed Universal Music Group.The pan-European STOXX 600 index edged down 0.1 at 0709 GMT, following a subdued close last week. Crude oil prices—an important factor for energy-dependent Europe—rose more than 2 after the United States and Iran confirmed exchanging fire over the weekend, even as diplomatic efforts to resolve the three-month-long conflict continued. Geopolitical tensions also remained elevated between Israel and Lebanon’s Hezbollah.Most sectors traded in negative territory. Airline stocks, including Lufthansa and Air France, slipped marginally, while energy shares gained 1.1 on the back of rising oil prices.Despite ongoing uncertainty, analysts noted that corporate earnings and forward guidance have been more resilient than expected this reporting season. Goldman Sachs raised its 12-month target for the STOXX 600 index to 660.In mergers and acquisitions news, easyJet shares surged 11 after the British low-cost airline said it had not received any formal takeover approach from U.S.-based investment firm Castlelake, but would consider any offer if presented. Castlelake confirmed it is in the early stages of evaluating a potential bid.Meanwhile, shares of Universal Music Group fell 1.5 after the company rejected an unsolicited takeover proposal from Bill Ackman’s Pershing Square Capital Management.