European Stocks Rebound as Oil Prices Fall Amid Mideast Tensions

European stocks are set to post their first weekly gain in four weeks as oil prices decline, despite ongoing tensions in the Middle East.

The pan-European STOXX 600 index rose 0.6% to 640.43 points by 0821 GMT, putting it on track for a nearly 1% weekly increase. In contrast, energy shares fell 0.7%, while airline stocks advanced, driven by oil-price sensitivity.

Senior market analyst Daniela Hathorn noted that even though there are 'positive signs' of dialogue and agreement in the Middle East conflict, 'there's still a lot of uncertainty because we've been here before.'

The European Central Bank's decision to lift interest rates earlier this month has contributed to euro zone government bond yields rising for the seventh consecutive week. Hathorn warned that further tightening could be 'damaging for the economy' as growth is not in its best position.