European Stocks Plunge On Downbeat German Data, Middle East Tensions

(RTTNews) - European stocks fell sharply on Friday, ending a roller coaster week on a downbeat note as traders feared an escalation of geopolitical tensions over the weekend.

Violence in the Middle East has flaring all week, with militants blowing up Christian holy sites in Iraq and Palestinians calling for a "day of rage" in response to Israeli attacks.

Meanwhile, a reading on German business confidence fell short of expectations, sparking fresh concerns about the pace of euro zone recovery.

Figures from the Ifo Institute showed its business-climate survey fell to 108.0 in July, marking a third straight monthly decline.

The Euro Stoxx 50 index of eurozone bluechip stocks dropped 1.49 percent, but managed a modest weekly gain of 0.25 percent.

The German DAX gave back 1.53 percent, the French CAC 40 lost 1.82 percent and the UK's FTSE 100 was down 0.44 percent.

Royal Bank of Scotland rallied 10 percent. The lender said its first-half profit surged from last year, reflecting a fall in impairment losses.

Balfour Beatty PLC jumped 8 percent as the construction and services company said it is in preliminary merger talks with rival Carillion PLC, whose shares rose more than 6 percent.

British Sky Broadcasting slipped 5 percent after saying it will pay 4.9 billion pounds to buy Sky Italia and a 57.4% stake in Sky Deutschland from 21st Century Fox.

LVMH plunged 6.8 percent, after reporting lower profit for the first half of the year.

Danone is down 0.4 percent. The French dairy giant said its first-half profit declined from last year, hurt by decreased sales in dairy and early-life nutrition businesses.

Lafarge edged down slightly after second-quarter profit rose.

Air France-KLM jumped 3 percent. The airline reported sharply narrower net loss in its second quarter.

Vodafone rose 2.5 percent. The telecom giant said its performance is beginning to stabilise quarter-on-quarter in several European markets.

In other news, the U.K. economy expanded as expected in the second quarter underpinned by services and manufacturing, data showed.

Gross domestic product grew 0.8 percent sequentially in the second quarter, the same as seen in the first quarter, preliminary data from the Office for National Statistics showed.