Europe open: Shares edge lower as Ukraine war dampens sentiment

European shares edged lower at the open on Friday as investors monitored the war in Ukraine and plans to commit extra troops along the eastern borders of NATO countries in the region.

The pan-European Stoxx 600 was 0.2% lower, with all major regional bourses following suit.

World leaders met on Thursday to discuss the Russian invasion of its neighbour. NATO committed extra troops along its eastern flank, while the UK and US introduced more sanctions against Russian elites and officials.

“Threats from (US) President Biden of a NATO response if more lethal weapons are used by Russia has raised worries about potential escalation, which is weighing on sentiment. High commodity prices, sent soaring by the repercussions of the conflict, have been flagged by companies as a drag on growth this year,” said Hargreaves Lansdown analysts Susannah Streeter.

On the economic front, UK retail sales unexpectedly fell in February, with online shopping dropping back below pre-pandemic levels and storms keeping shoppers away, according to figures released on Friday by the Office for National Statistics.

Retail sales declined by 0.3% following a 1.9% jump in January, missing expectations for a 0.6% increase. This left sales 3.7% above pre-pandemic levels in February 2020.

In equity news, shares in Telecom Italia jumped 6%, after KKR said it remains interested in taking over the phone group.

Sweden’s Trelleborg surged more than 20% to the top of the Stoxx after Yokohama Rubber announced that it would buy its tire business for $2.18bn.