Iran retaliates with strikes on US bases

The pan-European Stoxx 600 slid 0.6% in early trade, with banking stocks shedding 1% to lead losses as all sectors except oil and gas entered negative territory.

Tehran retaliated to Washington’s killing of its top military commander late Tuesday, launching more than a dozen ballistic missiles targeted at U.S. military forces in Iraq. It was not immediately clear whether any U.S. service members were harmed in the attacks.

Iranian Foreign Minister Mohamad Javad Zarif said via Twitter that “we do not seek escalation or war, but will defend ourselves against any aggression.”

“All is well!” President Donald Trump tweeted, adding that an assessment of casualties was taking place.

Oil and traditional safe havens like gold and the Japanese yen surged following the attacks, while riskier assets such as equities fell. MSCI’s broadest index of Asian shares excluding Japan shed 0.5%.

Back in Europe, British Prime Minister Boris Johnson is meeting with European Commission President Ursula von der Leyen Wednesday, where he is due to tell her that the U.K. will not extend its transition out of the EU beyond Dec. 2020.

In corporate news, Sainsbury’s reported a weak Christmas quarter before the bell, attributing a drop in like-for-like sales to poor demand for general merchandise while emphasizing solid food sales. The British supermarket chain’s stock hovered around the flatline in early deals.

As for data, German factory orders fell unexpectedly in November on the back of weak foreign demand, according to figures published Wednesday morning.

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