UPDATE 2-European stocks wilt after Saudi attack, though oil shares jump

* Oil & gas stocks log best day since Jan 2019
* China industrial output growth weakens in August
* Energy-heavy Norway shares rise, airlines drop

(Updates to close)
By Sruthi Shankar
Sept 16 (Reuters) - Oil and gas companies stood out in a
gloomy session for European stock markets on Monday as an attack
on Saudi Arabia's oil facilities thrust crude prices higher,
while heightening geopolitical concerns among investors.
The oil & gas index .SXEP surged 2.8% to log its biggest
percentage gain since January 2019, after the weekend's attack
on the world's largest crude exporter disrupted more than 5% of
global oil supply. Oil prices soared as much as 20%, with Brent crude LCOc1
posting its biggest intraday gain since the 1990-1991 Gulf
crisis before easing off its peaks. O/R
That helped energy-heavy Norwegian stocks .OSEAX jump
1.65%, boosted by Equinor EQNR.OL and Aker BP AKERBP.OL , the
top gainer on STOXX 600.
Oil majors BP BP.L , Shell RDSa.L and Total TOTF.PA
jumped between 2.5% and 4%, while UK and Irish-based explorer
Tullow Oil TLW.L gained 8.4% after the firm said it plans to
drill three or more exploration wells in Guyana. Most other major European sectoral indexes fell, with shares
in Airbus AIR.PA and French luxury goods exporters sliding as
the European Union acknowledged it may face U.S. tariffs in a
long-running dispute over aircraft subsidies. Airbus shares dropped 3.4%, while LVMH LVMH.PA , Christian
Dior DIOR.PA and Hermes HERM.PA fell between 2.8% and 4.5%.
"Despite a strong lift for oil stocks, the larger, more
liquid, higher-capitalisation indices in western Europe with the
strongest global links were all weak," City Index's Ken Odeluga
wrote in a note.
"It looks like investors assess the situation as having
potential to further weigh on a geopolitical landscape already
beset by the slowing global economy, Brexit and trade."
The Iran-aligned Houthi group that controls Yemen's capital
claimed responsibility for the attack, although a Saudi-led
coalition said on Monday the attacks were carried out with
Iranian weapons.
President Donald Trump said Washington was "locked and
loaded" to hit back. Adding to some weak indicators from China last week,
industrial production in the world's second largest economy grew
at its weakest pace in 17-1/2 years in August. The pan-European STOXX 600 index .STOXX ended down 0.6%,
ending a four-day winning streak, while trade-sensitive German
shares .GDAXI dropped 0.7%.
The weekend's events halted a march higher in European
stocks, which logged their fourth week of gains on Friday as
investors moved back into cyclical sectors amid signs of
progress in U.S.-China trade talks.
After the European Central Bank cut rates deeper into
negative territory last week and relaunched bond purchases with
no scheduled end-date, all eyes are now on the U.S. Federal
Reserve's policy meeting this week.
The central bank is widely expected to ease interest rates
and signal further moves. Travel and leisure stocks .SXTP dropped 0.6%, dragged down
by shares of airlines Ryanair Holdings RYA.I , Air France KLM
SA AIRF.PA and EasyJet PLC EZJ.L on worries of higher fuel
costs hurting profits.
Shares in Italian infrastructure group Atlantia ATL.MI
slid another 8% after Italy's tax police said they had found
evidence that safety reports for some viaducts operated by
Atlantia's motorway unit had been falsified or information
omitted.