Europe open: Stocks slip amid geopolitical tensions in Far East

Stocks have started the morning lower, with aggressive rhetoric out of North Korea ahead of joint US-South Korea military exercises weighing on sentiment amid a sparse economic calendar at the start of the week.

As of 0836 BST, the benchmark Stoxx 600 was down by 0.31% or 1.15 points to 373.05, alongside a 0.49% or 59.37 point drop in the Dax 30 to 12,107.03 and an 0.59% or 30.25 point fall in the Cac-40 to 5,085.20.

In parallel, euro/dollar was slipping 0.18% to 1.1739 while front month Brent crude oil futures were 0.3% lower to $52.58 a barrel on the ICE.

At the weekend, Pyongyang said the joint US-South Korea military excercises which were due to start on Monday were "reckless behaviour driving the situation into the uncontrollable phase of a nuclear war."

Washington and Seoul on Monday kicked off the regularly-scheduled yearly Ulchi-Freedom Guardian exercises which in the prior two editions had led to provocative acts from the North, be it test-firing missiles or even small incursions into South Korean territory.

"The manoeuvres have prompted a hostile reaction from Seoul’s neighbours to the North, claiming that a ‘merciful strike’ will be unleashed upon the US territories of Guam and Hawaii," said Henry Croft, research analyst at Accendo Markets.

Acting as a backdrop, according to the Journal, European Central Bank chief Mario Draghi would use his appearance at the Federal Reserve bank of Kansas City's central banking symposium at the end of the week to set out the case for ending quantitative easing.

On the economic calendar for Monday were the results of the Belgian central bank's consumer confidence suvery for August at 1500 BST.

It's an M & A Monday

China's HNA Group purchased a 16.2% stake in Swiss airport retailer Dufry AG from Singapore's sovereign wealth funds GIC and Temasek but no deal value was announced.

The transaction boosted HNA's stake in the Swiss outfit to 20.92%.

Meawnhile, Russia's Rosneft and a consortium formed by Trafigura and United Capital Partners each picked up a 49% stake in Essar Oil for $12.9bn.

In other M & A news, AP Moeller Maersk sold its oil and gas unit to French oil major Total for $7.45bn.