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European shares tumble on Middle East tensions; oil stocks near 2-month high

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Jan 6 (Reuters) - European shares extended losses on Monday as tensions following the killing of a top Iranian general by the United States kept buying restricted to safe havens, while energy stocks benefited from higher oil prices.

Gold prices jumped to a near seven-year high, while global equities extended losses from Friday. Oil prices rose on fears of supply disruptions.

The European oil and gas stock index rose about 0.6% and was the sole gainer among its peers, touching a near two-month high.

The pan-European STOXX 600 equity index was down 0.7% by 0808 GMT and was set for its worst day in a week. German stocks were the worst performers in the region, dropping about 1%.

Meanwhile, investors were awaiting business activity data from the euro zone for December, which is expected to remain in expansion, albeit barely, according to a Reuters poll.

(Reporting by Ambar Warrick in Bengaluru Editing by Arun Koyyur)