LONDON - European stock markets slid Thursday as the escalation of the crisis in Yemen and suspicions a Germanwings co-pilot deliberately crashed the plane into the French Alps unnerved investors.
Europe's main stock markets pulled back, with London's benchmark FTSE 100 index ending the day down 1.37 percent at 6,895.33 points
London's benchmark FTSE 100 index ended the day down 1.37% at 6,895.33 points, while Frankfurt's DAX 30 index slid 0.18% to 11,843.68 points and the CAC 40 in Paris shed 0.29% to 5,006.35 points.
The euro Thursday rose to a three-week high of $1.1052, before pulling back to $1.0921, down $1.0973 late in New York on Wednesday.
The euro has come under heavy pressure in recent months, falling to multi-year lows against the pound and dollar on eurozone strains and expectations that the US and Britain would soon raise interest rates.
"Today was just one of those days in which nobody is going to buy stocks," said analyst Jasper Lawler at CMC Markets.
"Air strikes in Yemen and what appears to be a horrific massacre of a plane full of passengers by its co-pilot are just not the making of a risk-friendly environment."
Saudi warplanes bombed Huthi rebels in Yemen on Thursday, launching an Arab military intervention in support of Yemen's embattled president that regional rival Iran warned was a "dangerous" move.
Oil prices shot up in response, but analysts said the gains were likely to be short-lived as the market is oversupplied.
Meanwhile, shares in Lufthansa tumbled more than four percent after investigators revealed startling information about Tuesday's crash in the French Alps of a plane from Lufthansa's low-cost division Germanwings, killing all 150 on board.
The Germanwings co-pilot "deliberately" initiated the descent and refused to open the door to the pilot who was outside the cockpit, the lead investigator said on Thursday.
Lufthansa's CEO Carsten Spohr told a press conference he was "stunned" by the revelations, adding that no security "system in the world" could have prevented the co-pilot's actions.
Lufthansa shares finished the day down 2.88% at 12.99 euros.
Shares in other airlines also took a hit.
Air France-KLM shares fell 1.28 to 7.61 euros, while shares in IAG, the owner British Airways and Iberia, dropped 3.37 percent to 587.00 pence.
Shares in Airbus, which had fallen sharply on Wednesday over concerns the crash may have been due to some problem with the A320 which is the company's top-selling plane, rebounded 2.12% to 60.14 euros.
- Investors book profits -
Other analysts see investors taking profits as the end of the first quarter approaches.
"The drop in the market is warranted and is due to profit-taking after a strong rally that has lasted nearly three months," said Alexandre Baradez at IG France.
The DAX is up nearly 21%, the CAC 17% and the FTSE 5 percent since the beginning of the year.
Elsewhere, Borse Dubai said it had sold its significant stake in the London Stock Exchange, sending the British group's share price plunging.
The stake is worth pound sterling1.53 billion according to the LSE share price at the close of trading on Wednesday, at 2,538 pence.
LSE's share price crashed to 2,395 pence, down 5.63%.
US stocks drifted lower Thursday as the Yemen crisis lifted oil prices amid worries US equities have become overvalued.
The Dow Jones Industrial Average slipped 0.05% to 17,709.06 points in midday trading.
The broad-based S&P 500 shed 0.15% to 2,058.00, while the tech-rich Nasdaq Composite Index lost 0.34% to stand at 4,860.06.